GNC Holdings to price $250 million five-year convertibles to yield 1.5%-2%, up 30%-35%

By Rebecca Melvin

New York, Aug. 4 – GNC Holdings Inc. plans to price $250 million of five-year convertible senior notes after the market close on Tuesday that were talked to yield 1.5% to 2% with an initial conversion premium of 30% to 35%, according to market sources.

The Rule 144A deal has a $37.5 million greenshoe and was being sold by J.P. Morgan Securities LLC as bookrunner and UBS Securities LLC as co-manager.

The notes are non-callable, have takeover protection and will be convertible into cash, shares or a combination of both.

About $100 million of the proceeds will be used to repurchase shares of common stock from purchasers of the notes. Remaining proceeds will be used to reduce borrowings under its term loan facility.

Pittsburgh-based GNC is a specialty health and wellness retailer.

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