Liberty Interactive cuts par amount of two more exchangeables series

By Susanna Moon

Chicago, July 19 - Liberty Interactive Corp.'s subsidiary Liberty Interactive LLC reduced the principal amount of its 4% senior exchangeable debentures due 2029 and 3.75% senior exchangeable debentures due 2030.

The adjustment per $1,000 principal amount was $63.096 for the 4% notes, lowering the par amount to $936.904, and $46.1258 for the 3.75% notes, cutting the par amount to $953.8742, according to a company press release.

The beginning par amount was $468,782,000 for the 4% notes, and the reduced amount is $439,203,750. The beginning par amount was $459,999,000 for the 3.75% notes, and the resulting par amount is $438,781,168.

The company will make an extraordinary cash distribution to holders of record on July 10 as a result of a merger between Sprint Nextel Corp. and SoftBank Corp.

The cash distribution will be made on Aug. 7.

Under the note terms, the merger constitutes a reference share offer, which requires a reference share offer adjustment to the number of reference shares underlying each debenture, the company noted.

The total cash distribution will be $29,578,250 for the 4% notes, or $63.0960 per bond, and $21,217,832 for the 3.75% notes, or $46.1258 per bond.

The principal amount of the notes will be reduced by the amount of each extraordinary cash distribution that the company pays on the notes.

In addition, the adjusted principal amount will be further reduced on each successive semiannual interest payment date to the extent necessary to cause the semiannual interest payment on that date to represent the payment by Liberty, in arrears, of an annualized yield equal to the stated cash coupon rate on the adjusted principal amount of the debentures, the press release said.

More recent adjustments

The company announced on July 16 a semiannual payment of $17.50 per $1,000 original principal amount of its 3.5% senior exchangeable debentures due 2031. According to a press release, the payment, which was made on July 15 to holders of record on July 1, consisted of $6.7825 in principal amount and $10.7175 in interest.

As of July 15, the adjusted principal amount of each debenture in the original principal amount of $1,000 is $605.6481.

There have been two extraordinary distributions to holders of the debentures: $162.616 per $1,000 principal amount on Jan. 10, 2007 due to Freescale Semiconductor's going-private transaction and $184.096 per $1,000 principal amount on June 20, 2012 as a result of Motorola Mobility Holdings, Inc.'s acquisition by Google Inc.

Under the note terms, the principal amount of the notes is to be reduced by the amount of each extraordinary cash distribution on the debentures.

The adjusted principal amount will be further reduced on each successive semiannual interest payment date to the extent needed to cause the interest payment on that date to represent the payment by Liberty of an annualized yield of 3.5% of the adjusted principal amount of the notes.

The company said that the reductions to the principal amount of the debentures will not affect the amount of the semiannual interest payments received by noteholders, which will continue to be 3.5% per year.

Englewood, Colo.-based Liberty Interactive owns interests in electronic retailing, media, communications and entertainment businesses.

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