Forest City holders agree to exchange $40.5 million 5% convertibles

By Angela McDaniels

Tacoma, Wash., March 5 – Forest City Enterprises, Inc. agreed to issue stock and cash in exchange for about $40.5 million principal amount of its 5% convertible senior notes due 2016, according to a company news release.

The noteholders will receive 2,805,513 shares of the company's class A common stock plus about $6.2 million of cash, including accrued interest, consideration for additional interest that would have been payable on the exchanged notes through maturity and in lieu of fractional shares.

The exchanges are being made under separate, privately negotiated exchange agreements. They are expected to close on March 11.

About $9.5 million of the convertibles will remain outstanding after the exchanges.

The company said the exchange transactions reflect its focus on reducing debt and improving its balance sheet.

Forest City is a Cleveland-based real estate company.

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