bonds later this week to help balance its $2.5 billion purchase of Lucent Technologies Inc.'s power systems unit.

When sold, Tyco's offering would be the largest convertible sale this year, following a $2.0 billion offering from fibre-optic maker Corning Inc. earlier this month and a matching $2 billion sale from contract electronics manufacturer Solectron Corp. in May.

"We knew the market was very eager to see a high-grade name like Tyco come across the slate, so we knew it was kind of a sweet spot in the marketplace,'' said Michael Robinson, senior vice president and corporate treasurer at Tyco International.

"We had not done a convertible offering before, we had that opening in our capital structure, so that was really the primary reason why we went for a convertible structure to finance this transaction.

"The market is in very good shape right now for that kind of paper,'' Robinson said. Convertible bonds are hybrid securities that usually offer current income and can be converted into company stock. Their fortunes are closely tied to underlying stock prices. Some investors consider the bonds a safer way to invest in companies whose stocks may be volatile.

Zero-coupon convertible bonds pay no interest on an ongoing basis, but can carry a "coupon'' if held to maturity. Earlier yesterday Tyco, which makes products ranging from undersea telecommunications networks to fire protection systems and disposable medical products, announced it plans to acquire Lucent Power Systems (LPS), which makes switching power supplies, batteries and back-up power systems for the computer industry.

The company hopes to complete its merger by year-end.