Ship Finance talks $150 million five-year convertibles at 4.375% to 4.875%, up 27.5% to 32.5%

By Abigail W. Adams

Portland, Me., April 18 – Ship Finance International Ltd. plans to price $150 million in five-year convertible notes prior to the market open on Thursday with price talk for a coupon of 4.375% to 4.875% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Morgan Stanley & Co. LLC, Jefferies LLC and Citigroup Global Markets Inc. are bookrunners for the registered offering, which carries a greenshoe of $22.5 million.

In connection with the convertible note offering, Ship Finance will enter into share lending agreements with the underwriters for up to 7 million shares of common stock.

The borrowed shares are newly issued and will be cancelled or held as treasury shares at the end of the share lending agreement, according to a company news release.

The initial purchasers may sell up to 7 million borrowed shares, which the company expects will be used to establish their initial hedge positions in the notes.

Proceeds will be used for general corporate purposes, which may include the pursuit of business combinations, acquisitions, expansion, repayment of debt or share repurchases, according to a company news release.

Ship Finance is a Hamilton, Bermuda-based limited liability company focused on investments in the maritime industry.

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