Forest City to issue stock in exchange for $248.3 million convertibles

By Susanna Moon

Chicago, Feb. 27 – Forest City Enterprises, Inc. said it will issue stock in exchange for $248.3 million of two series of convertible senior notes under separate, privately negotiated exchange agreements.

The company will exchange about $120.1 million principal amount of its 4.25% convertible senior notes due 2018 and about $128.2 million principal amount of its 3.625% convertible senior notes due 2020, according to a press release.

After settlement, about $229.9 million of the 2018 notes and $171.8 million of the 2020 notes will remain outstanding.

In exchange, the company will issue a total of 10,838,998 shares of its class A common stock plus cash for accrued interest and in payment for additional interest payable on the notes through maturity.

Holders of the 2018 notes and 2020 notes will receive 46.1425 shares and 41.3129 shares, respectively, of the common stock per $1,000 principal amount of notes exchanged, which is the same number of shares into which the notes are currently convertible, the press release noted.

The total cash payment is expected to be $20.2 million to $40.9 million in the aggregate, depending on the daily volume-weighted average price of the company’s class A common shares over a 20-day trading period beginning Feb. 27.

The exchanges will have a two-part closing with the expected settlement of Class A common shares on March 4 and the cash payment on March 31.

The exchange reflects the company’s continued focus on reducing debt and improving its balance sheet, the company said.

Forest City is a Cleveland-based real estate company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.