Borland prices $125 million five-year convertibles to yield 2.75%, up 25%

By Kenneth Lim

Boston, Feb. 1 - Borland Software Corp. priced $125 million of five-year convertible senior notes on Thursday after the market closed at a coupon of 2.75% and an initial conversion premium of 25%.

The deal came at the rich end of talk, which had put the coupon at 2.75% to 3.25% and the initial conversion premium of 20% to 25%.

The conversion price is $6.38 and the conversion ratio 156.8627.

The notes were offered at par.

There is an over-allotment option for a further $15 million.

JP Morgan was the bookrunner of the Rule 144A offering.

The notes will be non-callable and may not be put.

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

There will be dividend and takeover protection.

Borland, a Cupertino, Calif.-based developer of application lifecycle management software, said it will use the proceeds to buy back about $25 million of its common stock and for general purposes, including potential acquisitions.

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