Liberty Interactive makes payments to holders of exchangeables

By Angela McDaniels

Tacoma, Wash., Jan. 15 – Liberty Interactive Corp. subsidiary Liberty Interactive LLC made a semiannual payment to the holders of its 3.5% senior exchangeable debentures due 2031 and an additional distribution to the holders of its 4% senior exchangeable debentures due 2029, according to company news releases.

3.5% exchangeables

The amount of the semiannual payment on the 3.5% exchangeable is $17.50 per $1,000 original principal amount of debentures. Of this amount, $10.3552 is interest and $7.1448 is an additional payment of principal.

The semiannual payment was made Thursday and reduced the adjusted principal amount of each debenture to $584.5803 from $591.7251.

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 $0.6312 per debenture, attributable to the quarterly dividends paid by Motorola Solutions Inc. on Oct. 15 and Jan. 15. Payments of excess regular cash dividend amounts do not result in adjustments to the principal amount of the debentures.

4% exchangeables

The amount of the additional distribution made on the 4% exchangeables is $0.8489 per debenture. Of this amount, $18.7128 is interest and $1.2872 is an additional payment of principal.

The semiannual payment was made Nov. 15 and reduced the adjusted principal amount of each debenture to $935.6421 from $934.3549.

Like with the 3.5% exchangeables, the original principal amount of the 4% exchangeables is adjusted in an amount equal to any extraordinary distribution made by the company to the holders.

To date, there has been one extraordinary distribution to holders of the debentures. On Aug. 7, 2013, Liberty made an extraordinary distribution of $63.0960 per $1,000 original principal amount of debentures arising from the merger transaction between Sprint Nextel Corp. and SoftBank Corp.

Liberty also made an additional distribution of $0.8489 per debenture, attributable to the quarterly cash dividend paid by CenturyLink Inc. on June 20, 2014 and Sept. 12. This does not result in an adjustment to the adjusted 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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