biz.yahoo.com
<<-based Amazon.com, the world's top Internet retailer, said Friday it sold 690 million euros ($681 million) of convertible subordinated notes late Thursday, to add to the $1.25 billion it sold in January.
The new notes, which increased Amazon.com's total indebtedness to about $2.14 billion, carried a 6.875 percent coupon and a 36 percent conversion premium. Investors had expected a coupon of 6.875 to 7.375 percent and a premium of 35 to 40 percent. Morgan Stanley, Dean Witter & Co. led the sale.
The company's stock closed Thursday and Friday at 76-3/16, off 33 percent from its 52-week split-adjusted high of 113.
But the money-losing company, whose stock has been under pressure from recent reports of Internet vandalism, had to offer a substantial coupon and two unusual provisions to attract investors.
First, the company has the right to redeem the bonds early during the first three years. But if it does so, it will remain responsible for three years of coupon payments.
Secondly, the company promised to revise the conversion price downward after one and two years if its stock price fails to achieve certain prescribed levels.
''What Amazon is saying is, we think there is sufficient likelihood our stock price will be up, so if we're wrong, we're willing to offer a lower premium,'' said a source close to the transaction.>> |
