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Strategies & Market Trends : Dave Gore's Trades That Make Sense -- Ignore unavailable to you. Want to Upgrade?

To: Dave Gore who wrote (10935)	8/8/2002 1:41:21 PM
From: KaiserSosze	Read Replies (1) \| Respond to of 16631

Looks like ORB has the financing just about done! Regards, Kaiser =DJ CONVERTIBLE CORNER: Orbital Sciences Turns To Junk Mkt By Tom Barkley Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Satellite maker Orbital Sciences Corp. (ORB), shut out of the convertibles market last month, is now bringing its bid to refinance $100 million in maturing convertible bonds to the straight bond market. The Dulles, Va.-based company, which warned in its second-quarter 10-Q filing with the Securities and Exchange Commission that its "continuation as a going concern" is dependent upon its ability to refinance the October maturity, has sweetened the high-yield offering to lure investors. The Rule 144a privately placed deal, which was boosted to $135 million from the proposed $100 million convertible offering in order to also refinance a $25 million term loan, consists of four-year senior notes secured by a second lien on all the company's assets, according to people familiar with the transaction. The notes will have a secondary priority to a three-year $35 million credit revolver the company received along with the term loan in March from Foothill Capital Corp. As a sweetener, investors will also be offered warrants to purchase 16.5 million in Orbital stock, issued at a 10% premium to the company's share price. A hedge-fund manager who has considered participating in both the convertible and the high-yield offering says the warrants represent about the same amount of stock that would have been issued under the initial terms of the convertible offering. However, the high-yield offering offers a lower conversion premium and much higher interest, he added, with price talk suggesting a yield of around 12%. Jefferies & Co., bookrunner on the convertible, is also bringing the high-yield offering. "I think the high-yield guys view this as getting a very sweet deal," the fund manager said, adding that he will also likely participate if the offering gets done. "The company knows it has to do something." The convertible deal, which was shelved as the company's stock lost about half its value in the month of July, offered investors a coupon of between 7.5% and 8.0% with a 15% to 20% conversion premium. The stock was recently trading up 16 cents, or 4.6%, at $3.61 a share. Several investors who balked at the convertible deal said the new terms are attractive enough to make a bid. "It's still a convertible bond, but it's got a high-yield type of coupon on it," said a portfolio manager at a convertible fund who owns some of the outstanding Orbital 5% convertible notes due Oct. 1. "It's got a big coupon on it," he added. "And if the stock pops a couple of bucks on the announcement that the deal got done, the warrants could appreciate in value and allow me to book a gain right off the bat." Similar to convertibles, which are fixed-income securities that can be converted into stock, the proposed deal consists of bonds with equity warrants. The main difference is that the warrants are separate in the new deal, and can be traded in for stock while the bonds are still outstanding. The deal, which is slated to price Thursday, is close to getting done, say people familiar with the deal. A spokesman for Orbital declined to comment. Officials from Jefferies weren't available to comment. (MORE) DOW JONES NEWS 08-08-02 12:24 PM- - 12 24 PM EDT 08-08-02