General Cable $75 million convertible talk tightens to 5.75-6.25% yield, up 18-22%

By Ronda Fears

Nashville, Nov. 17 - Price talk on General Cable Corp.'s $75 million redeemable convertible preferred offering was tightened to a yield of 5.75% to 6.25% from 6.5% to 7.0%, but the premium is still expected in a range of 18% to 22%.

The convertible is pricing alongside $275 million of seven-year senior unsecured notes, which are talked to price in the 9.75% neighborhood.

A roadshow for the $275 million of senior notes due 2010 is expected to wrap up on Tuesday, with pricing soon thereafter. The convertible is expected to price after Tuesday's close.

Both are part of a comprehensive $640 million refinancing plan that will replace the company's current bank credit facility, provide additional liquidity, extend debt maturities and cut leverage.

The refinancing plan also includes a $240 million senior secured asset-based revolving credit facility and $50 million of common stock.

UBS Investment Bank and Merrill Lynch & Co. Inc. are joint bookrunners on the offerings.

The stock offering will be made under the company's shelf registration on file with the Securities and Exchange Commission, but the convertible offering will be in the Rule 144A market. The senior notes will be sold in the Rule 144A market in the United States and Regulation S market outside the United States.

General Cable, a Highland Heights, Ky.-based wire and cable manufacturer, plans to use proceeds to fully repay its existing senior secured revolving credit facility, senior secured term loans and accounts receivable asset-backed securitization facility, as well as for general corporate purposes.

Standard & Poor's and Moody's Investors Service have not rated the proposed General Cable convertible.

Moody's assigned a B1 rating to the senior secured revolver and a B2 rating to the senior notes, with a stable outlook. At the same time, General Cable's senior unsecured issuer rating was cut to B3 from B2. The ratings reflect high leverage, low interest coverage and a difficult business environment, Moody's said, but also consider recent signs of improving demand.

S&P assigned a BB rating to the bank revolver and a B rating to the senior notes, with a negative outlook. The negative outlook, S&P said, reflects a possibility that recovery could take longer than expected, with profitability and debt protection measures remaining depressed beyond the first half of 2004.

General Cable shares closed Monday down 58 cents, or 6.5%, to $8.34. On Nov. 5, when the convertible was launched, the stock was at $9.68.

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