ABB holders convert 98% of 4.625% convertibles for cash incentive; remainder called

By Jennifer Chiou

New York, May 9 - ABB International Finance Ltd. said holders of 98% of its $968 million of 4.625% convertible unsubordinated bonds due 2007 agreed to convert their holdings into American Depositary Shares representing ordinary shares of ABB Ltd.

The offer ended at 5 p.m. ET on May 4.

The company said it will issue about 107 million ADSs and added it will call the remainder of the convertibles.

ABB will pay the premium to parity plus 125 basis points and accrued interest up to but excluding the payment date of May 11. The premium to parity is based on the average price of ABB ADSs on May 4, May 5 and May 8 and ranges from negative 0.36% if the ADS price reaches $16.06 to 3.80% if the ADS price is at or below $12.46.

Convertible holders will also receive the dividend due on May 8 to ADS holders and a conversion fee equal to 0.55% of the principal amount of bonds converted.

Conversion of all bonds would have resulted in the delivery of up to 107,198,228 ADRs, which would increase the number of issued ABB shares by roughly 5%.

ABB said the offer is being made in order to strengthen the company's equity base and further reduce debt.

Fortis Banque Luxembourg SA (+352 4242 4599) is paying and conversion agent. Citibank NA is (212 657-7465) is the depository. Barclays Bank plc, Deutsche Bank AG, HSBC Bank plc and Citibank NA are dealer managers.

ABB is a Zurich, Switzerland-based power and automation technology company.

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