Convergys accepts $122.5 million of 4 7/8% notes in exchange offer

By Angela McDaniels

Tacoma, Wash., Oct. 13 - Convergys Corp. accepted for exchange about $122.5 million principal amount of 4 7/8% senior notes due 2009, according to a company news release.

Under an exchange offer that began on Sept. 9, the company offered to issue up to $125 million principal amount of 5¾% junior subordinated convertible debentures due 2029 in exchange for up to $122,549,019 of the 4 7/8% notes.

The company announced the preliminary results of the offer on Oct. 7 and confirmed those results in an Oct. 13 news release.

Roughly $171.1 million principal amount, or 88.8%, of the $192.6 million of 4 7/8% notes was tendered by the offer expiration, which was midnight ET on Oct. 6.

Because the offer was oversubscribed, notes were accepted on a pro rata basis. The proration factor was 71.6%.

Holders received $1,020 principal amount of convertibles for each $1,000 principal amount of 4 7/8% notes tendered plus accrued interest up to but excluding the settlement date, which was Oct. 13.

The new debentures are convertible in certain circumstances into cash and common stock.

The initial conversion price is $12.0741, which is equal to 125% of the volume-weighted average price of the company's stock for the three business days ended Oct. 2.

The VWAP was $9.6593, and this is the "reference price" for the purposes of calculating the adjustment to the conversion rate applicable in the case of certain make-whole fundamental changes.

The new convertibles are callable at par beginning Sept. 15, 2019 if Convergys' stock closes at or above 150% of the conversion price for at least 20 trading days during any 30-trading-day period.

The offer was conditioned on the issue of at least $50 million principal amount of convertibles.

Approximately $70.1 million of the 4 7/8% notes remain outstanding.

J.P. Morgan Securities Inc. (800 261-5767 or 212 622-2781) was the dealer manager, U.S. Bank NA was the exchange agent, and D.F. King & Co., Inc. (800 290-6427 or 212 269-5550) was the information agent.

Convergys is a Cincinnati-based relationship management services company.

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