Emulex $450 million overnight convertible talked at 0.0-0.25%, up 60-65%

By Ronda Fears

Nashville, Dec. 8 - Emulex Corp. launched $450 million of 20-year convertible senior notes, on swap, talked to yield 0.0% to 0.25% with a 60% to 65% initial conversion premium.

Proceeds are aimed in part to repurchase the company's 1.75% convertible notes due 2007 as market conditions permit.

Credit Suisse First Boston is bookrunner of the Rule 144A deal.

The subordinated notes will be non-callable for five years, with puts in years five, 10 and 15.

There is a 120% contingent conversion trigger.

There is a $67.5 million greenshoe available.

Emulex said it plans to use proceeds to repurchase up to 1.5 million shares of its common stock concurrently with the offering and to repurchase all or a portion of its outstanding 1.75% convertible notes due 2007, depending on market conditions.

The 1.75% convertibles were quoted off 0.125 point to 93.875 bid, 94.875 offered.

Emulex shares ended off 37 cents, or 1.35%, to $27. In after-hours trading, the stock was down another 27 cents, or 1%.

Proceeds also will be used for working capital and general corporate purposes, including potential acquisitions, although the company said it has no concrete plans with respect to any potential acquisitions.

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