Pegasus Solutions $75 million convertible talked at 3.375-3.875% yield, up 35-40%

By Ronda Fears

Nashville, July 14 - Pegasus Solutions Inc. launched $75 million of 20-year convertible notes talked to yield 3.375% to 3.875% with a 35% to 40% initial conversion premium.

Bear Stearns & Co. and JPMorgan are joint bookrunning lead managers of the Rule 144A deal, which is slated to price after the close Tuesday.

The senior notes will be non-callable for five years, with a put in years five.

There also is a 120% contingent conversion trigger.

There is a $15 million greenshoe available.

Pegasus said proceeds would be used for working capital and other general corporate purposes.

Pegasus shares closed up 77c, or 4.78%, at $16.87.

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