Liberty makes another payout on 4% exchangeables; par amount reduced

By Susanna Moon

Chicago, May 19 – Liberty Interactive Corp. subsidiary Liberty Interactive LLC said it will make another payout to holders of its 4% senior exchangeable debentures due 2029 in connection with a recent merger.

On June 16, the company will pay another distribution of $614.4332 per $1,000 original principal amount of debentures, with a record date of June 1. Afterward, the adjusted principal amount of the notes will be $385.5668.

The payout is thanks to the extraordinary cash distribution made to former holders of common stock of Time Warner Cable, Inc. on May 18 related to the merger with Charter Communications, Inc. and the amount is based on the average transaction amount paid in the merger, according to a company press release.

Under the note terms, the original principal amount is reduced by an amount equal to each extraordinary distribution made to noteholders. After that, the adjusted principal amount is further 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 0.075% of the adjusted principal amount, the release noted.

The latter adjustment, to the extent it is made because 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 distribution. Liberty said it has not previously paid an extraordinary distribution to noteholders.

Holders will not receive the additional distribution if they give a notice of exchange before June 1, the record date.

As a result of the Charter, Time Warner merger, the reference shares attributable to each $1,000 principal amount consists of a basket of 3.1648 shares of class A common stock of Charter, 5.1635 shares of common stock of Time Warner, Inc. and 0.6454 of a share of common stock of Time, Inc., the release added.

Liberty said on May 16 that it had made an additional distribution of $0.8489 per debenture because of the quarterly cash dividends paid by CenturyLink Inc. on Dec. 8 and March 18, which did not result in the par amount being adjusted.

Holders also received the regular semiannual interest payment of $20.00 per $1,000 original principal amount of debentures, the company noted at the time.

On May 15, the principal amount was adjusted to $930.3369 per debenture from $931.7028.

Before that, on Aug. 7, 2013, Liberty made an extraordinary distribution of $63.0960 per $1,000 original principal amount of debentures arising from the merger between Sprint Nextel Corp. and SoftBank Corp.

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

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