Spansion Place $240M Debentures
Monday June 5, 5:07 pm ET
Spansion to Privately Place $240 Million in Debentures to Pay Off Notes
SUNNYVALE, Calif. (AP) -- Flash memory device maker Spansion Inc. said Monday that its operating company subsidiary, Spansion LLC, will privately place $240 million in senior subordinated debentures to pay off certain outstanding senior subordinated notes.
The debentures, due 2016, will be exchangeable for Spansion Inc. common stock or cash.
The interest rate, exchange rate and offering price will be determined through negotiations with the debenture buyers, who will also have an option to buy an additional $35 million principal amount of the debentures.
The proceeds will be used to pay off the company's 12.75 percent senior subordinated notes, due 2016, and for capital expenditures and daily corporate operations.
Shares of Spansion fell 43 cents or 2.5 percent to end at $16.76 on the Nasdaq.
biz.yahoo.com
Spansion fell 7% (2+% in regular trading, plus ~5% in AH trading on 3800 shares).
I'd say using the proceeds to pay off more expensive debt should be seen as positive. Spansion however will use some of it for capital expenditures and daily operations, and that can't be seen as entirely positive, as it could mean that Spansion's cash flow is tight.
Regards,
Rink |
