Ingersoll-Rand to sell $300 million three-year exchangeables at 4.75%-5.25%, up 17.5%-22.5%

By Rebecca Melvin

New York, March 30 - Ingersoll-Rand Global Holding Co. Ltd., a subsidiary of Ingersoll-Rand Co. Ltd., plans to price $300 million of three-year exchangeable senior notes, which were talked to yield 4.75% to 5.25% with an initial conversion premium of 17.5% to 22.5%, according to a market source.

The registered offering, being sold via bookrunners Credit Suisse, Goldman Sachs & Co. and J.P. Morgan Securities Inc., was expected to price after the close of markets Tuesday.

There is a greenshoe of 15%, or $45 million; and concurrently with offering Ingersoll-Rand will offer a benchmark-sized amount of senior notes.

The convertibles, which will be exchangeable into cash and shares of the company's class A common shares, will be non-callable for life and have contingent conversion at a hurdle of 130% and net share settlement.

In addition, the company said it has arranged to increase a 364-day trade receivables financing facility to an additional $200 million of financing over current levels.

Proceeds from the notes offerings along with the expansion of the receivables financing facility will be used to repay the bridge loan that matures in June 2009 and provide additional liquidity for the company.

The offerings are intended to strengthen financial flexibility and enhance its credit profile, the company said in a release.

In related actions, the company reduced its dividend and said it expects estimated first-quarter adjusted diluted loss per share to be at the low end of its previously forecasted range of $0.15 to breakeven.

The earnings estimate excludes non-recurring costs such as those related to the acquisition of Trane and restructuring costs.

First-quarter revenue was projected to be in the range of $2.9 billion, a decrease of about 25% to 27% compared with pro forma 2008 results of $3.9 billion.

The company's original forecast for the quarter was for pro forma revenue to decrease by 19%, in the $3.1 billion to $3.2 billion range.

The company said it expects to meet its debt-reduction targets for 2009 as it continues to focus on generating earnings, managing working capital, controlling capital expenditures and reducing dividend payments.

Incorporated in Bermuda, Ingersoll-Rand is a global diversified industrial firm.

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