By Ronda Fears
Nashville, Tenn., Dec. 21 - Solectron Corp. sold $1 billion of three-year mandatory convertible preferreds at par of 25 to yield 7.25% with an 18% initial conversion premium. Goldman Sachs & Co. was sole lead manager of the registered deal, which was issued at the cheap end of guidance that put the coupon between 6.75% and 7.25% and the initial conversion premium at 18% to 20%.
Solectron also plans a $500 million unsecured fixed-rate debt offering in early 2002 and earlier this week secured a new $500 million revolving credit facility.
The Milpitas, Calif.-based electronics manufacturing services firm plans to use proceeds from the convertibles to pay in cash the January put on its zero-coupon senior convertible notes due in 2019, with accreted value of $530 million, and general corporate purposes.
Terms of the new deal are:
Issuer: Solectron Corp.
Amount: $1 billion
Greenshoe: $150 million
Lead Manager: Goldman Sachs
Maturity Date: Nov. 15, 2004
Dividend: 7.25%
Issue Price: par, $25
Yield-to-maturity: 7.25%
Conversion Premium: 18%
Conversion Price: $9.81/$11.58
Conversion Ratio: 2.1597/2.5484
Call: non-callable
Rating(s): Fitch: BB+
| Moody's: Ba2
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| S&P: BB+
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| Settlement Date: | Dec. 26
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| End
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