New Issue: Pride $250 million convertibles yield 2.5%, up 26%

By Ronda Fears

Nashville, Tenn., Feb. 27 - Pride International Inc. sold $250 million of five-year convertible notes at par to yield 2.5% with a 26% initial conversion premium. Deutsche Banc Alex. Brown was sole lead manager of the overnight Rule 144A deal.

Houston-based Pride, a drilling company, said proceeds would be used to refinance senior debt. The company also said that First Reserve Fund IX, a private equity fund that is related to First Reserve Fund VII and First Reserve Fund VIII, which own 9% of Pride's common stock, has agreed to purchase up to 7,874,015 shares of Pride common stock that may be sold short by purchasers of the notes concurrently with note purchases. Fund IX is purchasing the shares at $12.70 each, a 3% discount to the Tuesday closing price, Pride said.

Terms of the new deal are:

Issuer: Pride International Inc.

Amount: $250 million

Greenshoe: $50 million

Lead Manager: Deutsche Banc Alex. Brown

Maturity Date: March 4, 2007

Coupon: 2.5%

Issue Price: par

Yield to maturity: 2.5%

Conversion Premium: 26%

Conversion Price: $16.51

Conversion Ratio: 60.5694

Call: non-callable for three years with 150% hurdle and with make-whole provision for coupon payments

Settlement Date: March 4

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