Nortel Networks said Thursday that it will increase its $1 billion bond offering announced earlier in the week to $1.5 billion. The revised deal will offer notes that will yield interest of 4.25 percent and mature in 2008. Bondholders will have the option of buying up to $300 million more bonds within 30 days and can also convert them into stock valued at $10 a share. Nortel expects the offering to close on Aug. 15.
The higher offering resembles rival telecom gear maker Lucent's recent foray into the capital markets. Lucent made a convertible stock offering worth $1 billion in July, but then raised it to $1.75 billion a few days later because of heavy demand.