New Issue: CSX $400 mln (proceeds) convertibles at 1.0% yield, up 37.5%

By Ronda Fears

Nashville, Tenn., Oct. 25 - CSX Corp. sold $400 million in proceeds of 20-year zero-coupon convertible notes with a yield to maturity of 1.0% and 37.5% initial conversion premium. Credit Suisse First Boston is lead manager of the overnight registered deal, which sold at the middle of price talk.

Pricing guidance called for a 0.75% to 1.25% initial yield-to-maturity and a 35% to 40% initial conversion premium. Richmond, Va.-based CSX, a railroad company, said proceeds would be used to redeem other debt and to refinance a portion of outstanding commercial paper. The balance, if any, will be used for general corporate purposes.

Terms of the new deal are:

Issuer: CSX Corp.

Amount: $401.4 million (proceeds)

Greenshoe: $60 million (proceeds)

Lead Manager: Credit Suisse First Boston

Co-Managers: J.P. Morgan Chase and Salomon Smith Barney

Maturity Date: Oct. 30, 2021

Coupon: 0%

Issue Price: 81.914

Yield-to-maturity: 1.0%, to be reset in years six, 10 and 15

Conversion Premium: 37.5%

Conversion Price: $46.16

Conversion Ratio: 17.7461

Call: non-callable for seven years

Put: in years two, five, seven, 10 and 15

Contingent Conversion: 120% declining to 110%

Contingent Payment: no

Settlement Date: Oct. 30

End

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