By Ronda Fears
Nashville, Tenn., March 14 - Computer Associates Corp. sold an upsized $600 million of five-year convertible notes at par to yield 5.0% with a 33% initial conversion premium. Banc of America Securities and Salomon Smith Barney were joint lead managers of the overnight Rule 144A deal, which was increased from $500 million and sold at the aggressive end of price talk that had been tightened before pricing.
Revised price talk put the yield at 5.0% to 5.25% and initial conversion premium at 30% to 33%, versus original talk of 5.0% to 5.5% yield and a 25% to 30% premium.
Islandia, N.Y.-based Computer Associates said it expects to use some proceeds from the convertible sale to purchase call options to buy back shares, and thus limit the potential dilution to stockholders. The remainder will be used to refinance existing debt and for general corporate purposes.
Terms of the new deal are:
Issuer: Computer Associates Corp.
Amount: $600 million, up from $500 million
Greenshoe: $60 million, up from $50 million
Lead Managers: Banc of America Securities and Salomon Smith Barney
Maturity Date: March 19, 2007
Coupon: 5.0%
Issue Price: par
Yield: 5.0%
Conversion Premium: 33%
Conversion Price: $24.34
Conversion Ratio: 41.0846
Call: non-callable for three years
Put: in years three, five, 10 and 15
Ratings: Moody's: Baa2
| S&P: BBB+
|
| Settlement Date: | March 19
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
