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Forest City holders agree to exchange $88.41 million of convertibles
By Susanna Moon
Chicago, July 16 – Forest City Enterprises, Inc. said it agreed exchange about $8,151,000 of its 5% convertible senior notes due 2016, about $24,854,000 of its 4.25% convertible senior notes due 2018 and about $55.407 million of its 3.625% convertible senior notes due 2020.
In exchange, the company will issue shares of its class A common stock and cash, according to a company press release.
Specifically, holders will receive about 71.8894 shares in exchange for the 5% convertibles, 46.1425 shares for the 4.25% convertibles and 41.3129 shares for the 3.625% convertibles, which is the same number of shares into which the notes are convertible, the company said.
In addition, holders of the 5% convertible will receive a cash payment of about $1.3 million, including accrued interest.
The total cash payment for the other two series exchanged will range from a total of about $13.5 million to $19.3 million, depending on the daily volume-weighted average price of the company’s class A common stock over a five-day trading period beginning July 16, the release noted.
The exchange for the 5% convertible is expected to close July 21. The exchanges for the other two series will have a two-part closing with the expected settlement of class A common shares on July 21 and the cash payments on July 27.
After settlement, about $1.4 million of the 5% convertibles, $205.1 million of the 4.25% convertibles and $116.4 million of the 3.625% convertibles will remain outstanding.
The exchanges reflect “the company’s continued focus on reducing debt and improving its balance sheet,” the release added.
Forest City is a Cleveland-based real estate company.
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