WellPoint plans $1.35 billion 30-year convertible debentures to yield 2.5%-3%, up 20%-25%

By Rebecca Melvin

New York, Oct. 1 - WellPoint Inc. launched a $1.35 billion offering of 30-year convertibles after the market close Monday that was seen pricing after the market close Tuesday and was talked to yield 2.5% to 3% with an initial conversion premium of 20% to 25%, according to market sources.

The Rule 144A offering has a $150 million over-allotment option and was being sold via joint bookrunners Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and UBS Investment Bank.

The debentures are non-callable for 10 years and then are provisionally callable if the underlying shares are 150% of the conversion price. There are no puts.

The securities have net share settlement, and they have dividend and change-of-control protection.

Up to $600 million of proceeds are earmarked for stock repurchases concurrently with the debenture offering. The balance of proceeds will be used for general corporate purposes, including but not limited to additional share repurchases and repayment of short- and long-term debt.

The health benefits company is based in Indianapolis.

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