Tekelec $125 million convertibles talked to yield 2.25-2.75%, up 50-55%

By Ronda Fears

Nashville, June 10 - Tekelec launched $125 million of five-year non-callable convertible senior subordinated notes with talk for a yield of 2.25% to 2.75% and a 50% to 55% initial conversion premium. Pricing is scheduled for after Wednesday's close.

Morgan Stanley is lead manager of the Rule 144A deal.

Deutsche Bank Securities analysts put the deal, at the midpoint of guidance with the stock at $13.11, at 4.86% cheap, using a credit spread of 500 basis points over Libor and a 40% stock volatility.

There is a $25 million greenshoe available.

Tekelec said it would use proceeds to redeem its 3.25% convertible due 2004. The next call on the issue is in November at 96.67.

The 3.25s were quoted up 0.125 to 96 bid, 97 offer.

Tekelec shares closed up 48c, or 3.8%, to $13.11.

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