Nashville, Dec. 9 - Emulex Inc. sold $450 million of 20-year convertible notes at par to yield 0.25% with a 60% initial conversion premium in the overnight Rule 144A market via sole bookrunner Credit Suisse First Boston.
The subordinated notes priced at the cheap end of price talk of 0.0% to 0.25%, up 60% to 65%.
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. Also, the Costa Mesa, Calif.-based computer storage firm said it would use some proceeds to repay the $174 million that was borrowed in connection with the acquisition of Vixel Corp.
Any remaining proceeds will be used for working capital and general corporate purposes, which may include potential acquisitions, although the company said it has no current plans for more acquisitions.
Terms of the deal are:
| Issuer: | Emulex Inc.
|
| Issue: | Convertible subordinated notes
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| Bookrunner: | Credit Suisse First Boston
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| Amount: | $450 million
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| Greenshoe: | $67.5 million
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| Maturity: | Dec. 15, 2023
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| Coupon: | 0.25%
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| Price: | Par
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| Yield: | 0.25%
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| Conversion premium: | 60%
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| Conversion price: | $43.20
|
| Conversion ratio: | 23.148
|
| Contingent conversion: | 120%
|
| Call: | Non-callable for 5 years
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| Put: | In years 5, 10 and 15
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| Price talk: | 0.0-0.25%, up 60-65%
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| Pricing date: | Dec. 9, before the open
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| Settlement date: | Dec. 12
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| Distribution: | Rule 144A
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