Environmental Power to sell $10 million to $25 million five-year convertibles

By Rebecca Melvin

New York, Oct. 27 - Environmental Power Corp. plans to price $10 million to $25 million of five-year unsecured convertible notes in a registered offering being sold via Chicago-based Ziegler Capital Markets, according to a prospectus supplement filed with the Securities and Exchange Commission.

The offering may be increased to up to $50 million.

The deal, which is aimed at retail investors, is expected to be launched Wednesday, according to a Ziegler source. Price talk will not be available before then, he said.

"It's structured as a retail offering," the source said. "It's a little different."

The notes, which will be sold in denominations of $10,000 and mature Jan. 1, 2014, will be non-callable for three years and then provisionally callable at 110% of the principal amount of the notes plus accrued interest.

After three years, the company may require holders to convert all the notes into common stock.

Marketing will be ongoing, probably through the end of the year, with once-a month closings, the Ziegler source said.

Ziegler Capital Markets is a division of B.C. Ziegler Co.

Tarrytown, N.Y.-based Environmental Power is a developer, owner and operator of biogas renewable energy projects.

Its subsidiary, Microgy Holdings LLC, has entered into bond project financings in Texas and California. Proceeds of the notes will be contributed by Environmental Power to Microgy Holdings as equity.

Environmental Power trades on the Nasdaq Stock Market, under ticker symbol "EPG."

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