Meritor announces fundamental change under 3.25% convertibles

By Wendy Van Sickle

Columbus, Ohio, Aug. 3 – Meritor, Inc. said a fundamental change occurred on Wednesday under its 3.25% convertible senior notes due 2037, according to a news release.

The fundamental change resulted from consummation of a merger of Meritor, Cummins Inc. and Rose Newco In.

The company entered into a supplement to the convertibles’ indenture under which the right to convert each $1,000 principal amount has been changed into the right to convert such principal amount into an amount of cash equal to the conversion rate in effect on the conversion date, multiplied by $36.50.

Further, each holder will have the right to require the company repurchase their notes for cash on Sept. 14 at par plus accrued interest to but excluding that date.

The closing of the merger agreement also constituted a make-whole fundamental change, as a result of which notes surrendered for conversion through Sept. 13 will have an increased conversion rate of 30.4119 for a price of $1,110.03 per $1,000 principal amount. This compares to a conversion rate of 25.0474 for a price of $914.23 per $1,000 principal amount in the case of holders who convert their notes outside this special make-whole period.

The note trustee is U.S. Bank Trust Co., NA.

Meritor is a Troy, Mich., supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets.

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