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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jerome who wrote (49506)	7/20/2001 10:28:48 AM
From: michael97123	Read Replies (1) \| Respond to of 70976

From yahoo board re: novellus ....."First, these are zero coupon bonds, yes but Reuters says they yield ZERO to maturity. In other words, the issue price is $1,000 (that's what the press release says, and that is what the holder would get back by "putting" the bond (returning it to the company) at the one, five, 10, 15, 20, 25 year points, or at the 30 year maturity. So what does the buyer get in return for lending Novellus $1,000 per bond for up to 30 years? ONLY the right to trade the bond AT ANY TIME for 13 shares of Novellus. He pays nothing more to do this. He has already paid $77 per share by paying $1,000 for the bond (1,000 divided by 13). These bonds will not be registered and will only be available to "qualified institutional buyers". It seems to me these institutional buyers would have to be counting on the stock rising well above their $77 a share break even point. After all. the "52 to 55% premium above the July 19th closing price" (about 77 a share) represents, according to Reuters one of the highest premiums ever paid for a convertible bond."