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Published on 7/15/2014 in the Prospect News Convertibles Daily.

Liberty Interactive makes payments to holders of 3.5% exchangeables

By Angela McDaniels

Tacoma Wash., July 15 – Liberty Interactive Corp. subsidiary Liberty Interactive LLC made a semiannual payment to the holders of its 3.5% senior exchangeable debentures due 2031 on Tuesday, according to a company news release.

The amount of the semiannual payment is $17.50 per $1,000 original principal amount of debentures. Of this amount, $10.4781 is interest and $7.0219 is an additional payment of principal.

The semiannual payment reduced the adjusted principal amount of each debenture to $591.7251 from $598.7470.

If the company makes an extraordinary distribution to the holders, the original principal amount of the debentures is adjusted in an amount equal to the extraordinary distribution.

The adjusted principal amount is then reduced on each successive semiannual interest payment date to the extent necessary to cause the semiannual interest payment to represent the payment of an annualized yield of 3.5% of the adjusted principal amount. This latter adjustment, to the extent it is made by reason of a particular extraordinary distribution that results in an adjustment to the principal amount of the debentures, takes effect on the second succeeding interest payment date after the payment of that extraordinary distribution.

To date, there have been two extraordinary distributions to holders of the debentures. On Jan. 10, 2007, Liberty made an extraordinary distribution of $162.6160 per $1,000 original principal amount of debentures arising from Freescale Semiconductor’s going-private transaction. On June 20, 2012, Liberty made an extraordinary distribution of $184.0960 per $1,000 original principal amount of debentures arising from the acquisition of Motorola Mobility Holdings, Inc. by Google.

The company is also making an excess regular cash dividend amount distribution of $0.3156 per debenture, attributable to the quarterly dividends paid by Motorola Solutions Inc. on April 15 and July 15. Payments of excess regular cash dividend amounts do not result in adjustments to the principal amount of the debentures.

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


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