New Issue: CP Ships $175 million convertible yields 4.0%, up 35%

Nashville, Feb. 19 - CP Ships Ltd. sold $175 million of 20.4-year convertible senior subordinated notes at par to yield of 4.0% with a 35% initial conversion premium via joint lead managers Morgan Stanley & Co. and RBC Capital Markets.

The Rule 144A deal sold at the middle of price talk for a 3.75% to 4.25% yield, up 32.5% to 37.5%.

Settlement on the bonds will be in cash, stock or a combination of the two, at the issuer's option.

Holders will have dividend protection for annual cash dividends and distributions in excess of 16 cents per share.

The London-based shipping company said it will use proceeds to reduce borrowings under its two secured revolving credit facilities.

Terms of the deal are:

Issuer:	CP Ships Ltd.
Issue:	Convertible senior subordinated notes
Joint lead managers:	Morgan Stanley & Co. and RBC Capital Markets
Co-managers:	Citigroup Global Markets Inc. and Scotia Capital
Amount:	$175 million
Greenshoe:	$25 million
Maturity:	June 30, 2024
Dividend:	4.0%
Price:	Par
Yield:	4.0%
Conversion premium:	35%
Conversion price:	$25.22
Conversion ratio:	39.6511
Call:	Non-callable until July 3, 2008, or 5.4 years
Put:	On June 30, 2009, June 30, 2014 and June 30, 2019
Price talk:	3.75-4.25%, up 32.5-37.5%
Pricing date:	Feb. 19, before the open
Distribution:	Rule 144A

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