By Sarah Lizee
Olympia, Wash., Nov. 14 – Invacare Corp. entered into separate privately negotiated agreements with some holders of its 5% convertible senior notes due 2021 to exchange $72.9 million of the existing convertibles for a total consideration of $72.9 million in new 5% convertible senior exchange notes due 2024 and about $6.9 million in cash, according to a press release.
Following settlement, $61.1 million of the existing convertibles will remain outstanding with their terms unchanged.
The exchange is expected to close on Nov. 19, subject to customary closing conditions.
The new convertibles will bear interest at a rate of 5% per year and mature on Nov. 15, 2024.
The conversion rate for the new notes will initially be 67.6819 of the company’s common shares per $1,000 principal amount, equivalent to an initial conversion price of about $14.78 per common share.
The initial conversion price represents a premium of about 50% to the $9.85 per share last reported sale price of the company’s common shares on Nov. 13.
The new notes will be convertible at the option of the holders in some circumstances into cash, common shares or a combination of cash and common shares, at the company’s election.
The new convertibles provide the company with the option, at its election, to redeem them in whole or in part for cash prior to maturity if the last reported sale price of the company’s common shares equals or exceeds 130% of the then applicable conversion price for the required measurement period, at a redemption price equal to par plus any accrued interest.
Prior to May 15, 2024, the new notes will be convertible only upon satisfaction of some conditions and during some periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
Upon conversion, the new notes may be settled in cash, the company’s common shares or a combination of cash and the company’s common shares, at the company’s election.
In addition, following a redemption of the new convertibles by the company at its election or certain corporate events that occur prior to the maturity date, the company will pay a make-whole premium by increasing the conversion rate for a holder who elects to convert its new notes in connection with such a redemption or corporate event.
Holders can put the issue upon a fundamental change.
Invacare is an Elyria, Ohio-based manufacturer and distributor of medical equipment used in non-acute care settings.
Exchange notes
| Issuer: | Invacare Corp.
|
| Issue: | Convertible senior exchange notes
|
| Amount: | $72.9 million
|
| Maturity: | Nov. 15, 2024
|
| Coupon: | 5%
|
| Conversion premium: | 50%
|
| Conversion price: | $14.78 per share
|
| Conversion rate: | 67.6819 shares of stock per $1,000 of notes
|
| Call: | Callable if stock trades at or above 130% of the conversion price for measurement period
|
| Put option: | Upon a fundamental change
|
| Announcement date: | Nov. 14
|
| Settlement date: | Nov. 19
|
| Stock symbol: | NYSE: IVC
|
| Stock price: | $9.85 at close on Nov. 13
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