Gaylord Entertainment talks $200 million five-year convertibles to yield 3.5% to 4%, up 20% to 25%

By Rebecca Melvin

New York, Sept. 22 - Gaylord Entertainment Co. plans to price $200 million of five-year convertible senior notes in a Rule 144A offering, seen pricing Wednesday after the close, according to a syndicate source.

The deal was talked to yield 3.5% to 4%, with an initial conversion premium of 20% to 25%.

There is an over-allotment option for $40 million of additional notes. Concurrently Gaylord plans to price $125 million of common stock.

Deutsche Bank, Bank of America Merrill Lynch, Citigroup, Wells Fargo are joint bookrunners of the convertible offering.

The bonds are non-callable for life with no puts.

Gaylord intends to use a portion of the offering proceeds to enter into convertible note hedge transactions with affiliates of one or more of the initial purchasers of the notes.

The company also intends to enter into separate warrant transactions with affiliates of one or more of the initial purchasers, resulting in additional proceeds to Gaylord.

Remaining proceeds, together with other proceeds and cash on hand, will be used to repurchase all of Gaylord's $259.8 million of 8% senior notes due 2013, and for general corporate purposes.

Gaylord is a Nashville hospitality and entertainment company.

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