New Issue: Finisar downsizes to $100 mln 5.25% converts at 22.5% premium

By Ronda Fears

Nashville, Tenn., Oct. 10 - Finisar Corp. sold a revised new deal late Tuesday, pricing $100 million of seven-year convertible subordinated notes at par to yield 5.25% with a 22.5% initial conversion premium. The Rule 144A deal, for which Merrill Lynch was lead manager, originally had been scheduled to price the week of the Sept. 11 tragedy and the fiber optic company intended to raise $200 million.

The deal was reduced to $100 million, and the premium guidance lowered to 20% to 25% from 30% to 35%, and was rescheduled to price after the market close Thursday but was advanced, according to a market source close to the deal. Original yield price talk was not amended, at 5.0% to 5.5%, so the issue priced in the middle of revised pricing guidance.

Sunnyvale, Calif.-based Finisar plans to use proceeds for general corporate purposes, including working capital. Interest on the issue will be escrowed and guaranteed for the first three years.

Terms of the new deal are:

Issuer: Finisar Corp.

Amount: $100 million

Greenshoe: $25 million

Lead Manager: Merrill Lynch

Co-Managers: CIBC World Markets and JP Morgan Chase

Maturity Date: Oct. 15, 2008

Coupon: 5.25%

Issue Price: par

Yield: 5.25%

Conversion Premium: 22.5%

Conversion Price: $5.52

Conversion Ratio: 18.10037

Call: non-callable for three years, then at 103 declining to par

Settlement Date: Oct. 15

End

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