Just grabbed some in the 15 support area, looks like I paid 14.92. Let's see if it holds, should be a major fight here above and below 15.
The terms of the financing seem pretty favorable to me, both interest rate and the conversion. In fact, the conversion actually goes up as the stock goes up and it's now almost double the share price.
Here's some analysis and part of today's PR
20-Dec-07 07:37 ET In Play ADC Telecom: New convertible debt, favorable terms ... no change in outlook - Robert Baird (15.43 ) : Robert Baird notes ADCT announced a $400 mln convertible note offering, which it will use to pay off its $200 mln convert due June 2008. Remaining proceeds will be used for general corporate purposes or acquisitions. Firm views debt terms as attractive and model $0.01 EPS dilution for 2008 and $0.02 for 2009. They don't see offering as signaling a liquidity concern or imminent acquisition
Friedman, Billings, Ramsey and Co. analyst Brian Coyne said any near-term drop in the share price is a good opportunity for investors to aggressively buy the shares.
Despite the perceived earnings drain, he said that ADC "represents an attractive risk/reward opportunity for investors," and kept his "Outperform" rating.
ADC Announces Pricing of Convertible Subordinated Notes Offering
Wednesday December 19, 10:43 pm ET
MINNEAPOLIS--(BUSINESS WIRE)--ADC Telecommunications, Inc. (NASDAQ:ADCT - News) announced today the pricing of $200 million in aggregate principal amount of Convertible Subordinated Notes due 2015 and $200 million in aggregate principal amount of Convertible Subordinated Notes due 2017 under an automatically effective shelf registration statement filed with the Securities and Exchange Commission (SEC) on December 18, 2007. In addition, ADC granted the underwriters an option to purchase up to an additional $25 million aggregate principal amount of the notes of each series to cover over-allotments, if any. The 2015 notes and the 2017 notes will pay interest semi-annually at a rate of 3.50% per annum and 3.50% per annum, respectively. The notes are convertible into shares of common stock of ADC, based on, in the case of the 2015 notes, an initial base conversion rate of 37.0336 shares of common stock per $1,000 principal amount of the 2015 notes and, in the case of the 2017 notes, an initial base conversion rate of 35.0318 shares of common stock per $1,000 principal amount of the 2017 notes, in each case subject to adjustment in certain circumstances. This represents an initial base conversion price of approximately $27.00 per share in the case of the 2015 notes and approximately $28.55 per share in the case of the 2017 notes, representing a 75% and 85% conversion premium, respectively, based on the closing price of $15.43 per share of ADC’s common stock on December 19, 2007.
In addition, if at the time of conversion the applicable stock price of ADC’s common stock exceeds the base conversion price, the conversion rate will be increased by up to an additional 27.7752 shares of common stock per $1,000 principal amount of 2015 notes and an additional 29.7770 shares of common stock per $1,000 principal amount of 2017 notes, in each case as determined pursuant to a specified formula.
The notes of each series will be subordinated to existing and future senior indebtedness of ADC. ADC intends to use approximately $200 million of the net proceeds of the offering to repurchase prior to maturity or repay at maturity in June 2008 the outstanding $200 million aggregate principal amount of its 1% Convertible Subordinated Notes due 2008.
Any net proceeds from the offering that are not used to repurchase or repay the 1% Convertible Subordinated Notes due 2008 are expected to be used for general corporate purposes and strategic opportunities, including possible future acquisitions or investments in complementary businesses, technologies or products. ADC may also use a portion of the remaining net proceeds to repurchase prior to maturity or redeem, on or after June 23, 2008, all or a portion of the outstanding $200 million aggregate principal amount of its Floating Rate Convertible Subordinated Notes due 2013.
The offering is expected to close on December 26, 2007 and is subject to the satisfaction of customary closing conditions:
(PR continues . . . .) |
