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ABB bondholders approve repurchase of 5 1/8%, 5 3/8% bonds
New York, Sept. 9 - ABB Ltd. said holders of its €300 million 5 3/8% bonds due 2005 and €475 million 5 1/8% bonds due 2006 approved amendments allowing the redemption of the securities.
The Zurich-based power and automation technologies company said it intends to exercise those options on Sept. 29. The price, to be calculated on Sept. 27, will be on the same terms as the current tender offer for the bonds.
Before the bondholders' meetings on Thursday, investors had tendered €156.591 million or 57% of the 2005 bonds and €215.2 million or 59% of the 2006 bonds.
In 2004 before the tender was announced, ABB made open market repurchases of €25.314 million of the 5 3/8% bonds and €107.175 million of the 5 1/8% bonds, reducing the original principal amounts of €300 million and €475 million respectively.
Pricing in the tender is scheduled for Sept. 10 and settlement for Sept. 14.
"The completion of this bond repurchase will reduce ABB's debt by approximately $800 million and is part of ABB's strategy to cut gross debt to $4 billion by the end of 2005," said Peter Voser, ABB's chief financial officer, in a news release.
The tender was announced on July 29.
ABB will pay a tender price based on a fixed spread of 0.15% over the relevant benchmark interest rate (Euribor in relation to the 2005 bonds and mid-swaps in relation to the 2006 bonds). The exact purchase price will be calculated on the pricing date, based on the then-current market benchmark interest rates.
Barclays Capital (+44 20 7773 8990), Commerzbank Securities (+44 20 7469 3338) and Dresdner Kleinwort Wasserstein (+44 20 7475 4974) are dealer managers for the tender.
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