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Fleetwood abandons exchange for 6% convertible trust preferreds
New York, Aug. 17 - Fleetwood Enterprises, Inc. said it has withdrawn its planned exchange offer for the 6% convertible trust preferred securities due 2028 issued by Fleetwood Capital Trust.
Since it filed a registration statement with the Securities and Exchange Commission for the proposed transaction, the market value of the trust preferreds has increased while the market values of the company's common stock and its 5% senior subordinated debentures have declined, "making the exchange economically unattractive to Fleetwood," the company said.
"Based on the market value relationships of our various securities at the time of the filing, we believed we would be able to reduce our outstanding liabilities, eliminate all or a substantial portion of the existing deferred distributions on the trust preferred securities, reduce interest expense and improve our capital structure and credit statistics through an accretive exchange," said chief financial officer Boyd R. Plowman in a news release. "The change in the relationships of the market values has placed this goal out of reach."
Fleetwood said it will continue to look at alternatives for the deferred distributions on the trust preferreds.
Fleetwood had been proposing to offer new convertible senior subordinated debentures due 2025 for the trust preferreds.
In the registration statement, the Riverside, Calif., maker of recreational vehicles and manufactured housing said the exchange was intended to reduce its outstanding liabilities, eliminate "all or a substantial portion" of the outstanding deferred distributions on the trust preferreds, reduce its interest expense and improve its capital structure and credit statistics.
Details of the exchange were not disclosed.
Fleetwood currently has $201.25 million liquidation amount of the trust preferreds outstanding.
Lehman Brothers was to have been dealer manager.
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