Triumph to price $175 million of 20-year convertibles Wednesday, talked at 2.375%-2.875%, up 30%-35%

By Kenneth Lim

Boston, Sept. 11 - Triumph Group Inc. plans to price on Wednesday after the market closes $175 million of 20-year convertible senior subordinated notes, talked at a coupon of 2.375% to 2.875% and an initial conversion premium of 30% to 35%.

The convertibles will be offered at par.

There is a greenshoe option for a further $26.25 million.

Bank of America is the bookrunner of the Rule 144A offering.

The notes will be non-callable for the first five years, with puts in years five, 10 and 15.

There will be a contingent conversion hurdle at 130% of the conversion price.

The convertibles will have dividend and takeover protection, and a net-share settlement feature.

Triumph, a Wayne, Pa.-based maker of aircraft components, will use the proceeds of the deal to prepay its existing class A and B senior notes due 2012 and to repay part of a revolving credit line. Triumph said part of the reason for paying down that debt was to remove covenants in the senior notes in order to give the company more flexibility in making acquisitions.

Triumph stock closed at $44.19 on Monday, gaining 0.66% or 29 cents before the deal was announced.

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