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New Issue: EMC prices $3.45 billion five-, seven-year convertibles at 1.75%, up 27.5%
By Kenneth Lim
Boston, Nov. 14 – EMC Corp. on Monday priced a dual-tranche $3.45 billion offering of five- and seven-year convertible senior notes within talk, at a coupon of 1.75% and an initial conversion premium of 27.5%. The deal amount includes a $450 million over-allotment option that was immediately exercised.
The notes were offered at par, and the equally sized series were talked at a coupon of 1.5% to 2% and an initial conversion premium of 25% to 30%.
Goldman Sachs, Lehman Brothers and Citigroup were the bookrunners of the Rule 144A offering.
The convertibles are non-callable, and there are no puts.
The notes have dividend and takeover protection.
EMC, a Hopkinton, Mass.-based information technology solutions provider, will use about $278 million of the proceeds for convertible note hedge and warrant transactions. It will also repay $2.2 billion of senior debt used to finance its acquisition of RSA Security Inc. and concurrently buy back $945.8 million of its common stock.
Five-year tranche
Seven-year tranche
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Issuer: EMC Corp.
Issue: Convertible senior notes
Bookrunners: Goldman Sachs, Lehman Brothers and Citigroup
Pricing date: Nov. 13, after the close
Settlement date: Nov. 17
Distribution: Rule 144A
Amount: $1.725 billion, including $225 million greenshoe
Greenshoe: $225 million, already exercised
Maturity: Dec. 1, 2011
Coupon: 1.75%
Price: Par
Yield: 1.75%
Conversion premium: 27.5%
Conversion price: $16.08
Conversion ratio: 62.1978
Dividend protection: Yes
Takeover protection: Yes
Call protection: Non-callable
Puts: None
Price talk: 1.5%-2%, up 25%-30%
Amount: $1.725 billion, including $225 million greenshoe
Greenshoe: $225 million, already exercised
Maturity: Dec. 1, 2013
Coupon: 1.75%
Price: Par
Yield: 1.75%
Conversion premium: 27.5%
Conversion price: $16.08
Conversion ratio: 62.1978
Dividend protection: Yes
Takeover protection: Yes
Call protection: Non-callable
Puts: None
Price talk: 1.5%-2%, up 25%-30%
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