Digital River $175 million convertible talked at 0.75%-1.25%, up 33%-38%

By Ronda Fears

Nashville, May 25 - Digital River Inc. after the close Tuesday launched $175 million of 20-year convertible notes talked to yield 0.75% to 1.25% with a 33% to 38% initial conversion premium.

Credit Suisse First Boston is sole bookrunner of the Rule 144A deal, which is set to price after the close Wednesday.

The senior notes will be non-callable for three years and then with a 150% trigger in years three through five. There are puts in years five, 10 and 15.

There also is a 130% contingent conversion trigger.

Holders will have full dividend protection.

A $20 million greenshoe is available.

Eden Prairie, Minn.-based Digital River, which provides electronic-commerce outsourcing services, said a portion of the proceeds will be used to repay its senior secured revolving credit facility and the balance for general corporate purposes, including working capital, capital expenditures, acquisitions and the repurchase of stock.

Digital River shares closed Tuesday up $1.77, or 5.64%, to $33.13. In after-hours trading, the stock was down $1.75, or 5.22%.

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