Ceradyne $100 million 30-year convertibles talked to yield 2.875%-3.375%, up 30%-35%

By Rebecca Melvin

Princeton, N.J., Dec. 1 - Ceradyne Inc. plans to price $100 million of 30-year convertibles on Dec. 13, after the close, according to a syndicate source.

The senior subordinated bonds were talked to yield 2.875% to 3.375% with a 30% to 35% initial conversion premium, the source said.

The convertibles will be non-callable for five years, with puts in years seven, 10, 15, 20 and 25.

There is a greenshoe of $10 million.

Concurrent with the convertible offering, the company plans to sell 1.8 million shares of common stock with a greenshoe of 270,000 additional shares.

Citigroup Corporate and Investment Banking is bookrunner for the offering, with Wachovia Securities and Needham & Co. LLC co-lead managers.

The company plans to use a portion of the proceeds from both offerings to repay in full its credit facility, which was $110.9 million as of Sept. 30.

The rest of the proceeds will be used for working capital, capital expenditures and other general corporate purposes, including funding potential acquisitions of businesses, technologies or product lines.

Costa Mesa, Calif.-based Ceradyne develops and markets technical ceramic products for defense, industrial, automotive and commercial applications.

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