Sybase $400 million convertible talked with 1.5%-2.0% coupon, up 32.5%-37.5%

By Ronda Fears

Nashville, Feb. 14 - Sybase Inc. launched $400 million of 20-year convertible notes, to be sold on swap, with guidance for a 1.5% to 2.0% coupon and 32.5% to 37.5% initial conversion premium.

Lehman Brothers Inc. and Merrill Lynch & Co. are joint bookrunners of the Rule 144A deal, which is slated to price after the market close Tuesday.

The subordinated notes will be non-callable for five years, with cash puts in years five, 10 and 15. There also is a 130% contingent conversion trigger.

Dublin, Calif.-based Sybase, a wireless software company for mobile and wi-fi technologies, said it would use up to $125 million of proceeds to buy back stock concurrent with the notes offering.

Remaining proceeds, the company said, would be used for working capital and general corporate purposes, which may include the acquisitions, strategic investments or additional purchases of common stock.

Sybase shares closed Monday up 30 cents, or 1.57%, at $19.45. In after-hours trading, news of the convertible offering pushed the stock lower by 45 cents, or 2.31%.

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