Comcast starts change-of-control tender on remaining $107.666 million convertibles due 2020

New York, Dec. 20 - Comcast Holdings Corp. announced a change-of-control tender offer for its remaining 0% convertible debentures due Dec. 19, 2020.

The Philadelphia cable company has $107.666 million of the securities outstanding after holders had the option to put the convertibles at a price of $799.04 per $1,000 principal amount at maturity on Dec. 19.

The change-of-control offer follows the merger of Comcast Holdings, previously called Comcast Corp., and AT&T Broadband.

Comcast will pay $799.62 per $1,000 principal amount at maturity on Jan. 10, a price set equivalent to the issue price of the convertibles plus accrued original issue discount through Jan. 10. Repurchase notices should be submitted by on Jan. 9. They may be withdrawn up until 5.00 p.m. ET on that date. Notices received after Jan. 10 and before Feb. 18 will also receive $799.62.

Notices should be submitted to the paying agent for the convertibles, Bank of New York.

Alkermes sets conversion price for new convertibles

New York, Dec. 20 - Alkermes, Inc. said the conversion price for its new convertible notes will be $7.682.

The level was set at a 17.5% premium over the daily volume-weighted average price of the company's common stock for the five trading from Dec. 13 through Dec. 19.

The Cambridge, Mass. pharmaceutical company began the exchange offer on Nov. 26.

It is offering investors a smaller principal amount of new convertibles with a higher coupon and lower conversion price in exchange for its 3.75% convertible subordinated notes due 2007. The new bonds will also have a longer maturity and structural seniority.

In addition to the up to $115 million being offered in the exchange, Alkermes will also sell up to $50 million of the new convertibles to holders who participate in the exchange.

For each $1,000 principal amount of the existing convertibles, Alkermes is offering $575 principal amount of new 6.52% convertible senior subordinated notes due Dec. 31, 2009.

Interest will be payable in cash or stock at the company's option. If paid in stock the shares will be valued at 90% of the average trading price over five days ending two trading days before the interest payment date.

Alkermes will be able to force conversion of the new notes if the stock trades at 150% of the conversion price for 20 out of 30 trading days.

If a forced conversion occurs before December 2004 holders will receive an additional two years of interest. Similarly if holders voluntarily convert before December 2004 they will receive an additional two years of interest.

The existing notes convert at $67.75 for a ratio of 14.76. The $200 million issue was sold at par in March 2000 with a 12% initial conversion premium.

The exchange will expire at 5.00 p.m. ET on Dec. 24 unless extended.

U.S. Bancorp Piper Jaffray Inc. (877 420-2321, attention Jeffrey Winaker or Brian Sullivan) is the dealer manager for the exchange offer and placement agent for the cash offer. State Street Bank and Trust Co. is exchange agent. The information agent is Georgeson Shareholder Communications Inc. (866 318-0506).

Alkermes said the exchange will allow it to reduce its debt.

If fully subscribed, the exchange will eliminate $85 million principal amount of convertible notes, allow the company to convert virtually all its debt to equity if the stock rises approximately 75% above its current level and leave interest expense unchanged, the prospectus said. Alkermes will also raise $50 million of new capital.

Ciena raises tender price for ONI convertibles

New York, Dec. 20 - Ciena Corp. increased to $900 per $1,000 principal amount from $860 the price it is offering in its tender for ONI Systems Corp.'s 5% convertible subordinated notes due Oct. 15, 2005.

Other terms of the tender, announced on Dec. 12, are unchanged.

The tender price includes accrued interest up to but not including the date of payment.

Expiry for the tender is 5.00 p.m. ET on Jan. 13.

The Linthicum, Md. company said it is carrying out the tender to reduce interest expense and eliminate the need to repay or refinance the convertibles at maturity in 2005.

The company noted it bought back $97.1 million of the $300 million of ONI convertibles during the third quarter in the open market at a cost of $75.2 million. The securities had an accreted book value of $72.5 million at the time of purchase. As a result there is now $202.9 million principal amount of the notes outstanding.

The tender offer is not dependent on financing. Ciena said it will use cash, cash equivalents and short-term investments to fund purchases.

Investors can convert the notes at the rate of 7.7525 shares per $1,000 principal amount. Ciena stock closed at $5.18 Wednesday.

Dealer manager for the tender offer is Goldman, Sachs & Co. (212 902-1000), the depositary is State Street Bank and Trust Co. of California, NA and the information agent is Georgeson Shareholder Communications (866 295-4322).

Ciena said if it purchases all the outstanding ONI convertibles it will record a book loss of $18.7 million on the early extinguishment of debt.

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