Micron prices $1.135 billion seven-year convertibles to yield 1.875%, up 23.75%

Boston, May 17 - Micron Technology Inc. priced a slightly upsized $1.135 billion offering of seven-year convertible senior notes after the close Thursday to yield 1.875% with a 23.75% initial conversion premium.

The deal came at the middle of revised talk for a fixed 1.875% coupon and an initial conversion premium of 22.5% to 25%. The guidance had been narrowed from a coupon of 1.625% to 2.125% and an initial conversion premium of 22.5% to 27.5%.

At its final size, the deal was increased from the original $1.1 billion.

The conversion price is $14.23 and the conversion ratio 70.2679.

The convertibles were offered at par.

There is an over-allotment option for a further $165 million.

Morgan Stanley was the bookrunner of the registered offering with Credit Suisse Securities (USA) LLC and Lehman Brothers Inc. as co-managers for the offering.

The convertibles are non-callable for the first four years, after which they may be called subject to a hurdle at 130% of the conversion price. The convertibles may not be put.

There is a contingent conversion trigger at 130% of the conversion price.

The convertibles have dividend and takeover protection.

There is a net-share settlement option.

Micron, a Boise, Idaho-based maker of semiconductor devices, said it will use $132 million of the proceeds to fund capped call transactions with the remainder earmarked for general corporate purposes. The capped calls are in three equal tranches raising the effective conversion premium from Micron's point of view to 50%, 75% and 100%.

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