Exterran to price $250 million five-year convertibles to yield 4%-4.5%, up 22.5%-27.5%

By Rebecca Melvin

New York, June 4 - Exterran Holdings Inc. planned to price $250 million of five-year convertible notes after the close Thursday that were talked at a coupon of 4% to 4.5% with an initial conversion premium of 22.5% to 27.5%, according to a syndicate source.

There is a greenshoe of up to $37.5 million principal amount of additional notes.

J.P. Morgan Securities Inc., Merrill Lynch & Co., Wachovia Securities LLC and Credit Suisse are acting as joint bookrunners for the offering.

In connection with the registered, off-the-shelf offering, Exterran plans to enter into convertible note hedge and warrant transactions with one or more of the underwriters and their affiliates.

A portion of the proceeds will be used to pay the cost of the convertible note hedge transaction. The remainder of the proceeds will be used to pay down borrowings under the company's revolving credit facility and its asset-backed securitization facility.

Exterran is a Houston-based oil and gas production company.

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