Horizon Lines to offer $300 million of convertible senior notes

Horizon Lines to offer $300 million of convertible senior notes U.S. Jones Act carrier Horizon Lines said Tuesday it intends to offer about $300 million of convertible senior notes due 2012 to institutional buyers to help it repurchase up to about 1 million shares of its common stock.
   The Charlotte, N.C.-based company also expects to grant the initial buyers an option to purchase up to $30 million of additional notes.
   On top of the common stock repurchasing, Horizon Lines also intends to use the proceeds to enter into convertible note hedge transactions and to sell warrants to some of its initial purchasers. Some of the proceeds of the offering will go toward the cost of the hedge transactions. What’s left, along with cash on hand and borrowed funds, will be used to pay holders of its existing 9 percent senior notes due 2012 and its 11 percent senior notes due 2013.
   Horizon said the hedge deals are meant to offset the dilution of its stock when the notes are converted.
   The carrier serves Alaska, Hawaii, Puerto Rico, Guam and Saipan, and calls seven continental U.S. ports including New York.