Best Buy $350 million convertibles talked at 2.25-2.75% yield, up 33-37%

By Ronda Fears

Nashville, Tenn., Jan. 9 - Best Buy Inc. launched an overnight deal Wednesday with the $100 million of 20-year convertible subordinated debentures talked to price at a yield of 2.25% to 2.75% and with a 33% to 37% initial conversion premium. The Rule144A deal, via lead manager Credit Suisse First Boston, is pricing after the market close.

The issue will be non-callable for five years, with put options in years five, 10 and 15. There is a contingent conversion trigger of 120% and also a contingent payment feature. The notes are rated BB+ by Standard & Poor's and BBB- by Fitch and are expected to be rated Ba1 by Moody's Investors Service. The new issue will rank subordinate to Best Buy's existing 0.68% discount convertible due 2021.

The Minneapolis electronics retailer expects to use proceeds for general corporate purposes.

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