New Issue: Mesa Air $75 million proceeds cash-to-zero convertibles yield 6.25%, up 46%

By Ronda Fears

Nashville, June 11 - Mesa Air Group sold $75 million in proceeds of 20-year cash-to-zero convertible notes at 39.727 to yield 6.25% with a 46% initial conversion premium in the overnight Rule 144A market via Merrill Lynch & Co.

Terms were richened from guidance that put the yield at 6.0% and initial conversion premium between 52.5% and 55%.

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 with regard to future regional jet deliveries.

Terms of the deal are:

Issuer: Mesa Air Group

Issue:	Convertible notes
Lead manager:	Merrill Lynch & Co.
Amount	$75 million (proceeds), $189 million (face)
Greenshoe:	$25 million (proceeds), $63 million (face)
Maturity:	June 16, 2023
Price talk:	6.0% yield, up 52.5-55%
Coupon:	6.25% of issue price, 2.4829% of principal for five years, then 0%
Price:	39.727
Yield to maturity:	6.25%
Conversion premium:	46%
Conversion price:	$10.00
Conversion ratio:	39.727
Call:	Non-callable
Contingent conversion:	110%
Pricing date:	June 10 after close
Settlement:	June 16
Distribution:	Rule 144A

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