Maxtor $200 million convertibles talked at 6.45-6.95% yield, up 125-130%

By Sara Rosenberg

New York, May 1 - Maxtor Corp.'s $200 million convertible senior notes due 2010, scheduled to price Friday before the market open, is talked to yield 6.45% to 6.95%, with an initial conversion premium of 125% to 130%.

Bank of America is the bookrunner and Merrill Lynch & Co. is the co-manager on the Rule 144A deal.

There is a $30 million greenshoe.

The convertibles are non-callable for five years. There is a soft call in years six and seven at 130%.

The Milpitas, Calif. provider of hard disk drive storage products will use between $38 million and $62 million of the net proceeds to purchase shares of its common stock from one of the underwriters or its affiliate at the closing price of the company's common stock on Thursday, which was $5.45.

The company will use the remaining net proceeds for the repayment of indebtedness, investments, acquisitions, general corporate purposes and working capital.

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