Alloy brings conversions of 5.375% debentures to $56.6 million

New York, Oct. 3 - Alloy, Inc. said that a total of $56.6 million or 81.7% of its 5.375% senior convertible debentures have now been converted into Alloy and dELiA*s, Inc. common stock since Aug. 30.

The company has issued 1.7 million shares.

There are now $12.7 million of the convertibles outstanding.

"We are very pleased that these conversions of debentures have created approximately $23 million in value for our shareholders, based on the debt retired less the value of the Alloy stock issued and cash premiums paid," said Matt Diamond, chairman and chief executive officer of Alloy, in a news release.

"In addition, we expect our free cash flow to improve as a result of our future cash interest expense being reduced by over $3 million on an annual basis."

Alloy previously announced on Sept. 14 that it had issued 642,327 shares in exchange for $21.5 million of the convertibles.

On Aug. 28, the New York-based marketing company amended the indenture of the 5.375% convertibles to eliminate all of the conditions to convertibility. The debentures had been contingently convertible at 110%.

As a result of the amendment, the notes are immediately convertible into shares of Alloy common stock at a conversion price of $33.50 or shares of the common stock of former subsidiary Delia*s, Inc. at $16.75.

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