TAL Education's planned $200 million five-year convertibles talked at 2.25%-2.75%, up 27.5%-32.5%

By Rebecca Melvin

New York, May 14 - TAL Education Group planned to price $200 million of five-year convertible notes after the market close Thursday to yield 2.25% to 2.75% with an initial conversion premium of 27.5% to 32.25%, according to a syndicate source.

The Rule 144A and Regulation S deal was being sold via Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC as joint bookrunners.

The deal includes an over-allotment option for up to $30 million of additional notes.

TAL cannot call the bonds, but holders can put the notes on May 15, 2017, and there is a takeover put at 100% of principal plus interest.

The company is entering into a capped call transaction with one or more initial purchasers of the bonds.

Proceeds will be used to pay the net cost of the capped call transaction, for strategic investments and for general corporate purposes.

TAL is a Beijing-based provider of after-school tutoring services.

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