GenCorp to price up to $125 million 30-year convertibles to yield 3.75%-4.5%, up 20%-25%

By Rebecca Melvin

New York, Dec. 14 - GenCorp Inc. plans to price up to $125 million of 30-year convertible subordinated debentures after the close of markets Tuesday, which were talked to yield 3.75% to 4.5% with an initial conversion premium of 20% to 25%, according to a syndicate source.

The Rule 144A offering, which is being brought by bookrunner Morgan Stanley & Co., has an over-allotment option for up to an additional $18.75 million of debentures.

The debentures are provisionally callable for life at a price hurdle of 150%. If they are called within the first five years, the coupon has a make-whole provision that will be equal to the present value of the first five years of coupons at a 2.5% discount rate.

Holders can put the debentures in years five, 10, 15, 20 and 25, on Dec. 31, 2014, 2019, 2024, 2029, and 2034, respectively.

The debentures mature Dec. 31, 2039. Interest payments, repurchase or make-whole premiums are payable by delivering cash, shares of common stock or a combination of both.

GenCorp is a Rancho Cordova, Calif.-based defense company.

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