New Issue: M Systems sells $75 million convertible at 1.0%, up 26%

Nashville, March 18 - Israel-based M Systems Flash Disk Pioneers Ltd. sold $75 million of 30-year convertible senior notes at par to yield 1.0% with a 26% initial conversion premium via sole bookrunner Citigroup Global Markets Inc.

The Rule 144A deal priced at the cheap end of guidance for a coupon of 0.5% to 1.0% and initial conversion premium of 26% to 30%.

The company, which makes flash data storage solutions for digital consumer electronics markets, said proceeds would be used for general corporate purposes, as well as for potential strategic acquisitions of or investments in related businesses, product lines and technologies.

M Systems said, however, that it currently has no commitments for specific acquisitions or investments.

Issuer:	M Systems Flash Disk Pioneers Ltd.
Issue:	Convertible senior notes
Bookrunner:	Citigroup Global Markets Inc.
Amount:	$75 million
Greenshoe:	$25 million
Maturity:	March 15, 2035
Coupon:	1.0%
Price:	Par
Yield:	1.0%
Conversion premium:	26%
Conversion price:	$28.46
Conversion ratio:	35.137
Contingent conversion:	No
Contingent payment:	No
Dividend protection:	Yes
Takeover protection:	Yes
Call:	Non-callable for 3 years, then with a 130% hurdle in years 4 and 5
Put:	In years 5, 10, 15, 20 and 25
Price talk:	0.5%-1.0%, up 26%-30%
Pricing date:	March 17, after market close
Settlement date:	March 23
Distribution:	Rule 144A

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