Derwent London to buy back £150 million 1.125% convertible bonds

By Rebecca Melvin

New York, June 5 – Derwent London plc is buying back its outstanding £150 million of 1.125% convertible senior bonds that are due July 24, 2019, according to a company news release.

The company is also pricing a new £175 million convertible bond due 2025.

The old bonds, which priced initially in 2013, are being redeemed rather than converted to avoid potential dilution risk as the current share price is trading generally above the conversion price, the company said.

The repurchase price per £100,000 principal amount is being calculated as: £102,875 (initial repurchase price) plus ((reference share price minus closing share price) times 3,181.5318 (exchange ratio) times reference delta).

The initial repurchase price was based on the closing price of the outstanding bonds of 102.125% on June 4 plus a 0.75% tender premium. The reference delta is 65%.

In addition, the company will pay accrued interest from Jan. 24. That amount is expected to be £435.08 per bond, based on the expected June 13 settlement date for the repurchase.

Derwent London is a London-based real estate investment trust.

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