Meadowbrook Insurance plans $75 million seven-year convertibles to yield 4.5%-5%, up 37.5%-42.5%

By Rebecca Melvin

New York, March 11 - Meadowbrook Insurance Group Inc. planned to price $75 million of seven-year convertible senior notes after the market close Tuesday that were talked to yield 4.5% to 5% with an initial conversion premium of 37.5% to 42.5%, according to market sources.

The Rule 144A offering has a greenshoe of $11.25 million and is being sold via bookrunner J.P. Morgan Securities LLC.

The notes are non-callable for seven years with no puts. There is takeover protection.

Proceeds will be used for general corporate purposes, including repayment of debt and to purchase a call spread to mitigate potential dilution upon conversion of the bonds.

The Southfield, Mich.-based company is a holding company for its wholly owned subsidiary, Star Insurance Co.

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