Priceline $75 million convertible talked to yield 2.0%-2.5%, up 34%-41%

By Ronda Fears

Nashville, June 21 - Priceline.com Inc. launched after the closing bell Monday $75 million of 20.5-year convertible notes for a full day of marketing. The issue was talked to yield 2.0% to 2.5% with a 34% to 41% initial conversion premium.

Goldman Sachs & Co. is bookrunner of the Rule 144A deal, which is slated to price after the market close Tuesday.

The senior unsecured notes will be non-callable for 5.5 years with puts in years 5.5, 10.5 and 15.5. There is a 120% contingent conversion trigger.

Holders will have full dividend protection as well as cash takeover protection.

A $10 million greenshoe is available.

The Norwalk, Conn.-based online travel agency said it plans to use proceeds for general corporate purposes, including possible acquisitions and working capital.

Also Monday, Priceline hiked its forecast for second quarter earnings to a range of 29 to 32 cents per share, excluding special items, from 25 to 30 cents, citing stronger-than-anticipated airline and hotel bookings.

Priceline also said it was increasing advertising spending in the quarter to $15.5 million to $16 million from its previous target of $14 million to $15 million.

By segment, Priceline increased its outlook for airline ticket bookings to a growth range of 58% to 60% from 42% to 50%. Hotel bookings are now seen rising 30% to 32%, versus a previous estimate of 25%. Rental car bookings, however, were narrowed to a gain of 54% to 56% from 50% to 60%.

Priceline shares closed Monday down 65 cents, or 2.27%, to $28. In after-hours trading, the stock was up $1.28, or 4.5%.

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