Merrill Lynch $1 billion 0% convertible floaters talked at 3-month Libor minus 200 bps, up 30-33%

By Ronda Fears

Nashville, Tenn., March 6 - Merrill Lynch & Co. Inc. was pitching an overnighter after the close Wednesday. The investment bank was selling $1 billion of 30-year convertible senior floating-rate notes at three-month Libor minus 200 basis points with a 0% floor and the yield capped at 7.5%, according to market sources. Guidance puts the initial conversion premium at 30% to 33%. Merrill Lynch, Pierce, Fenner & Smith Inc. is bookrunning lead manager.

The 30-year issue will be non-callable for five years with puts in years three, five, 10, 15, 20 and 25. There is a contingent conversion feature with a 120% hurdle. There is a $150 million greenshoe available.

New York-based Merrill said proceeds would be used for general corporate purposes. Merrill common shares closed up $1.10 to $54.40, but were quoted in after-hours trading at 5:30 p.m. ET down $2 to $52.40.

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