New Issue: Zenith upsized $110 million convertibles yield 5.75%, up 29.3%

By Ronda Fears

Nashville, March 18 - Zenith National Insurance Corp. sold an upsized $110 million of 20-year convertible notes at par to yield 5.75% with a 29.3% initial conversion premium in the Rule 144A market, via joint lead managers Banc of America Securities and Merrill Lynch & Co.

The issue sold at the middle of yield talk of 5.5-6.0% and at the aggressive end of premium guidance for 25% to 30%.

Woodland Hills, Calif.-based Zenith, a property and casualty insurer, said it plans to use proceeds to repay its bank lines of credit and for general corporate purposes.

Terms of the deal are:

Issuer:	Zenith National Insurance Corp.
Issue:	Convertible senior notes
Joint lead managers:	Banc of America Securities and Merrill Lynch
Amount:	$110 million, upped from $105 million
Greenshoe:	$15 million
Maturity:	March 17, 2023
Coupon:	5.75%
Price:	Par
Yield:	5.75%
Conversion premium:	29.3%
Conversion price:	$25
Conversion ratio:	40
Call:	Non-callable for five years
Put:	At par in years 7, 10 and 15
Contingent conversion:	120% trigger
Contingent payment:	120% trigger
Expected ratings:	S&P: BB+
Settlement:	March 21

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