Nashville, July 29 - STMicroelectronics NV sold $1.217 billion of 10-year 0% decreting convertible bonds to yield minus 0.5% with a 55% initial conversion premium, via joint bookrunners UBS Investment Bank and Lehman Brothers.
The priced with a yield at the high end of talk of negative 0.5% to negative 1.0% and in line with the expected 55% conversion premium.
Holders will have dividend protection by way of a conversion ratio adjustment in the event of a 25% or more increase in the annual common dividend from 15c per share.
STM said proceeds would be used to repay its existing 0% senior convertible bonds due 2010, which are putable for cash Jan. 17, 2005, at an accreted value of $1.211 billion. In the interim, STM expects to invest proceeds in short-term, income-producing investments.
Terms of the new deal are:
Issuer: STMicroelectronics NV
| Issue: | Convertible senior unsecured notes
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| Lead managers: | | UBS Investment Bank and Lehman Brothers
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| Amount | $1.217 billion
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| Greenshoe: | $183 million
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| Maturity: | July 5, 2013
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| Coupon: | 0%
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| Price: | Par
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| Redemption price: | 95.157
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| Yield: | Minus 0.5%
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| Conversion premium: | 55%
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| Conversion price: | $33.43
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| Conversion ratio: | 29.9144
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| Call: | Non-callable for 3 years, then decreting with a 130% trigger
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| Put: | In year 3 at 98.509, year 5 at 97.528, year 7 at 96.556
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| Ratings: | Moody's: A3
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| S&P: A-
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| Price talk: | Minus 0.5-1.0%, up 55%
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| Pricing date: | July 29
|
| Settlement: | Aug. 5
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| Distribution: | Rule 144A/Regulation S
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