Four Seasons may redeem convertibles at September call

New York, Feb. 27 - Four Seasons Hotels Inc. said it may redeem some or all of its zero-coupon convertible notes due 2029 when they become callable in September.

It noted that a redemption is particularly likely "if the current interest rate and general business environment continues."

The Toronto luxury hotel operator's convertibles become callable at the issue price plus accrued interest at the rate of 4.5% on Sept. 23.

The securities are also putable on Sept. 23 at the issue price plus accrued interest at the rate of 4.5%. The put can be paid in cash or stock.

If Four Seasons calls all the convertibles it would have to pay $215.5 million in cash, assuming no holders exercise their conversion right.

A redemption could be funded by new debt, which could include bank lines or the issuance of new notes or convertibles, or from cash reserves or a combination of both.

Four Seasons issued $655.5 million principal amount or $172.5 million proceeds of the convertibles in 1999.

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