By Ronda Fears
Nashville, Tenn., Dec. 18 - Korea Telecom on Tuesday sold $1.2 billion of five-year convertible unsecured unsubordinated notes at par to yield 0.25% with a 20% initial conversion premium in the Rule 144A market, via joint book-running lead managers Merrill Lynch & Co. and UBS Warburg.
Some terms were yet to be fixed, according to syndicate officials.
Also of note, there will be a special clause in the security whereby the issuer will not protect bondholders for dividend increases up to a maximum of 20% per year over a reference level of 600 won per share. Any excess over and above this will lead to a downward adjustment of the conversion price equivalent to what would result if the excess were reinvested in additional ordinary shares of the issuer.
Korea Telecom said proceeds of the offering would be used to buy back shares from the Republic of Korea.
Term of the deal are:
Issuer: Korea Telecom
Amount: $1.2 billion, representing 25.41 million shares
Lead Managers: Merrill Lynch and UBS Warburg
Maturity Date: Jan. 4, 2007
Coupon: 0.25%
Issue Price: par
Yield: 0.25%
Conversion Premium: 20%
Conversion Price: to be fixed, based on Won local stock price
with an exchange rate of US$1=KRW and 1 ADS= 0.5 local share
Conversion Ratio: to be fixed
Call: non-callable for three years
Rating(s): Moody's: Baa2
| S&P: BBB+
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| Settlement Date: | Jan. 4
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