New Issue: Cray sells upsized $65 million convertible to yield 3.0%, up 37.5%

Nashville, Dec. 1 - Cray Inc. sold an upsized $65 million of 20-year convertible unsecured subordinated notes at par to yield 3.0% with a 37.5% initial conversion premium via sole bookrunner Bear Stearns & Co. Inc.

The Rule 144A issue, boosted from $60 million, also was advanced to price a day early and was sold at the tight end of guidance for a 3.0% to 3.5% coupon and a 32.5% to 37.5% initial conversion premium.

The Seattle-based computer maker said it would use proceeds to support operations and growth and other general corporate purposes.

Terms of the deal are:

Issuer:	Cray Inc.
Issue:	Convertible senior subordinated notes
Bookrunner:	Bears Stearns & Co. Inc.
Amount:	$65 million, up from $60 million
Greenshoe:	$15 million, unchanged
Maturity:	Dec. 6, 2024
Coupon:	3.0%
Price:	Par
Yield:	3.0%
Conversion premium:	37.5%
Conversion price:	$4.83
Conversion ratio:	207.2002
Contingent conversion:	120%
Contingent payment:	No
Net share settlement:	Yes
Dividend protection:	Yes
Takeover protection:	Yes
Call:	Non-callable for 3 years, then with a 150% hurdle and coupon make-whole provision in years 4 and 5
Put:	In years 7, 10 and 15
Price talk:	3.0-3.5%, up 32.5-37.5%
Pricing date:	Nov. 30, advanced from Dec. 1
Settlement date:	Dec. 6
Distribution:	Rule 144A

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