Mesa Air $75 million overnight cash-to-zero convertibles talked to yield 6%, up 52.5-55%

By Ronda Fears

Nashville, June 10 - Mesa Air Group launched $75 million of 20-year cash-to-zero convertible notes talked to yield 6.0% with a 52.5% to 55% initial conversion premium in the overnight Rule 144A market, according to market sources.

Merrill Lynch & Co. is lead manager of the deal.

The notes will pay a cash coupon for the first five years, then become a 0% accreting issue.

The issue will be non-callable for five years with puts in years five, 10 and 15, and there is a contingent conversion trigger of 110%.

Phoenix-based Mesa Air said it would use proceeds for general corporate purposes and to fund obligations for future regional jet deliveries.

Mesa Air shares closed up 10c, or 1.48%, to $6.85. The stock was seen in afterhours trading down 75c to $6.10.

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