New Issue: TXU upsized $440 million mandatory at 8.125% yield, up 23%

By Ronda Fears

Nashville, Tenn., May 31 - TXU Corp. sold an upsized $440 million of four-year mandatory convertibles in the Feline Prides structure at par of 50 to yield 8.125% with a 23% initial conversion premium, via lead manager Merrill Lynch & Co.

The deal, boosted from $250 million, sold at the aggressive end of pricing guidance that put the dividend between 8.125% and 8.625% and initial conversion premium at 17% to 23%.

TXU, a utility and energy trading company with telecom interests through a joint venture, also sold 11 million shares of common stock. The stock sale, upped from 9.5 million shares, sold at $51.15.

The mandatory will be non-callable.

Terms of the new deal are:

Issuer: TXU Corp.

Amount: $440 million

Greenshoe: $66 million

Lead Manager: Merrill Lynch

Co-Managers: Banc of America Securities, Credit Suisse First Boston and Salomon Smith Barney

Maturity Date: May 16, 2006

Dividend: 8.125%

Issue Price: par, $50

Yield-to-maturity: 8.125%

Conversion Premium: 23%

Conversion Price: $51.15/$62.915

Conversion Ratio: 0.9775/0.7947

Call: non-callable

Settlement Date: June 4

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