the dreaded convertible:
Lucent Technologies Announces Convertible Senior
Debt Offering Expected to Raise Approximately
$1.3 Billion
May 28, 2003 16:01:00 (ET)
MURRAY HILL, N.J., May 28, 2003 /PRNewswire-FirstCall via COMTEX/ -- Lucent Technologies (LU, Trade) today
announced a public offering of convertible senior debt expected to raise approximately $1.3 billion. The company expects
to apply the net proceeds toward the repayment or possible repurchase of certain short- and medium-term obligations
over time, as well as for general corporate purposes.
"This offering is part of our overall effort to strengthen the balance sheet and will provide us with added flexibility to retire
or satisfy certain debt, preferred stock and other obligations at significantly lower interest rates," said Lucent
Technologies Chairman and CEO Patricia Russo.
Lucent Technologies Chief Financial Officer Frank D'Amelio pointed out that the proceeds from this offering were not
included in the company's previous cash projections. Any portion of the proceeds from this offering that is not used by
Sept. 30, 2003, would have an incremental impact on the company's year-end cash balance.
The offering, which will be made off of the company's existing universal shelf registration statement, will consist of two
series of debt with expected maturity dates of 2023 and 2025, as well as various preset dates when the securities may
be redeemed at the option of either the holder or the company. Additionally under certain circumstances, the securities
may be converted into Lucent common stock at a preset value that is expected to represent a significant premium over the
stock's current trading price.
The joint book-running managers for the offering are Citigroup Global Markets and JPMorgan. In addition, HSBC is a
joint-lead manager for the offering.
In addition to the offering, Lucent today announced that it has entered into new senior secured credit facilities totaling
$595 million. These facilities allow the company to issue up to $245 million in new letters of credit, renew up to $350 million
of existing letters of credit, and secure certain other obligations. Under the terms of the facilities, Lucent may issue or
renew letters of credit with a term of up to 12 months at any time during the availability period, which runs through Dec.
31, 2004. The facilities may grow as more banks enter the agreement and include certain financial covenants.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state. A prospectus related to this offering may be obtained from
Citigroup Global Markets, Equity Syndicate Desk, 388 Greenwich Street, New York, N.Y., or J.P. Morgan Securities, 277
Park Avenue, New York, N.Y.
Lucent Technologies, headquartered in Murray Hill, N.J., USA, designs and delivers networks for the world's largest
communications service providers. Backed by Bell Labs research and development, Lucent relies on its strengths in
mobility, optical, data and voice networking technologies as well as software and services to develop next-generation
networks. The company's systems, services and software are designed to help customers quickly deploy and better
manage their networks and create new, revenue-generating services that help businesses and consumers. For more
information on Lucent Technologies, visit its Web site at lucent.com.
This news release contains forward-looking statements that are based on current expectations, estimates, forecasts and
projections about us, our future performance, the industries in which we operate, our beliefs and our management's
assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by or
on behalf of us. Words such as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes,"
"seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements. These risks and uncertainties include: the failure of the
telecommunications market to improve or improve at the pace we anticipate; continued net losses may reduce or impair
our legally available surplus; our ability to realize the benefits we expect from our strategic direction and restructuring
program; the impact of the substantial amount of our debt on our business; our ability to secure additional sources of
funds on reasonable terms; our credit ratings; our ability to compete effectively; our reliance on a limited number of key
customers; our exposure to the credit risk of our customers as a result of our vendor financing arrangements and
accounts receivable; our reliance on third parties to manufacture most of our products; the cost and other risks inherent
in our long-term sales agreements; our product portfolio and ability to keep pace with technological advances in our
industry; the complexity of our products; our ability to retain and recruit key personnel; existing and future litigation; our
ability to protect our intellectual property rights and the expenses we may incur in defending such rights; changes in
environmental health and safety law; changes to existing regulations or technical standards; the social, political and
economic risks of our foreign operations; and the costs and risks associated with our pension and postretirement benefit
obligations. For a further list and description of such risks and uncertainties, see the reports filed by us with the
Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations
of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the
distribution of this news release, whether as a result of new information, future events, changes in assumptions, or
otherwise.
SOURCE Lucent Technologies
Media Inquiries - Mary Lou Ambrus, +1-908-582-3060 - office,
+1-908-239-6654 - cell, mambrus@lucent.com, or Frank Briamonte,
+1-908-582-3193 - office, +1-800-607-9849 - pager, fbriamonte@lucent.com, or
Investor Inquiries - MaryAnn Niebojeski, +1-908-582-7793 - office,
+1-888-264-8403 - pager, mn36@lucent.com, or Dina Fede of Lucent,
+1-908-582-0366 - office, +1-888-417-3212 - pager, fede@lucent.com, all of
Lucent
lucent.com
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