Wabash $100 million convertible talked at 2.75-3.25% yield, up 27.5-32.5%

By Ronda Fears

Nashville, July 22 - Wabash National Corp. launched $100 million of five-year convertibles with guidance for a 2.75% to 3.25% yield and a 27.5% to 32.5% initial conversion premium.

Merrill Lynch & Co. is sole bookrunner of the Rule 144A deal, which is slated to price after the close Monday July 28. BB&T Capital Markets is a co-manager.

The senior unsecured notes will be non-callable and holders will have full dividend protection through a conversion ratio adjustment. There is a 110% contingent conversion trigger for life.

There is a $25 million greenshoe.

Wabash said it plans to use proceeds to repay outstanding debt.

Earlier Tuesday, the truckmaker reported a second quarter net loss of $27 million, or $1.05 per diluted share, compared to a net loss of $22 million, or $1.09 per diluted share charge, in second quarter 2002. Net sales were $230 million versus $210 million a year before.

Wabash chief executive William P. Greubel said in the earnings release that the company is in the final stages of a two-year turnaround process.

Agreements have been struck to sell substantially all of the company's leasing and rental business and aftermarket parts business for a total of around $65 million to $70 million, including $55 million in cash at closing, which is anticipated in third quarter.

He also said Wabash has selected Fleet Capital to lead and fully underwrite a new $250 million syndicated bank financing, consisting of a three-year asset based revolver and term loan that will be used to replace existing debt and substantially lower the cost of debt. Closing also is expected in the third quarter.

Wabash shares closed off 3c to $15.54.

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