Sierra Pacific exchanges 30% of convertibles for stock

New York, Feb. 3 - Sierra Pacific Resources said it exchanged 30% of its outstanding mandatory convertibles for stock as part of its strategy to strengthen its balance sheet and liquidity.

The exchange of the convertibles effectively accelerated their maturity, the Reno, Nev. electric utility said.

Sierra Pacific carried out the exchange through privately negotiated agreements with "a limited number" of investors.

Under terms of the transactions, 2,095,650 of Sierra Pacific's Premium Income Equity Securities (PIES) will be exchanged for 13.66 million shares of common stock.

Sierra Pacific said the exchange will reduce its outstanding parent company debt by $105 million and reduce interest expense by $26 million through the November 2005 conversion date.

Under the original terms, the PIES would have converted into 7.6 million shares.

The company said that the extra dilution is "significantly mitigated" by the interest savings and a 30% discount from the PIES' stated value.

Sierra Pacific stock closed at $4.64 on Friday.

The company issued $345 million of the PIES on Nov. 12 at par of $50 to yield 9% with a 20% initial conversion premium. The conversion price is $16.62.

Settlement of the exchange is scheduled for Feb. 5.

Sierra Pacific said it has no plans to retire additional outstanding securities through the issuance of common stock.

ResMed buys back $5 million convertibles

New York, Feb. 3 - ResMed Inc. said it bought back $5.0 million face value of its convertible subordinated notes during the fiscal second quarter.

The San Diego medical equipment company said it paid $4.8 million for the securities including $0.1 million of accrued interest.

ResMed described the repurchases as part of its "ongoing capital management activities."

Omnicom to pay $30 sweetener

New York, Feb. 3 - Omnicom Group Inc. said it will pay a $30 sweetener per $1,000 principal amount to holders of its Liquid Yield Option Notes due 2031 who do not exercise the put option.

The payment will be made to holders who have not exercised the option as of immediately after the close of business on Feb. 4.

The New York-based marketing and corporate communications company will make the additional payment on Feb. 21.

Omnicom noted that holders who bought the notes on Jan. 31 for three-day settlement will be qualified for the payment but not those who sold on Jan. 31 for three-day settlement.

Whole Foods Market to pay put in cash

New York, Feb. 3 - Whole Foods Market, Inc. said it will pay the upcoming put on its zero-coupon convertible debentures due 2018 in cash.

The put is exercisable on March 2.

Whole Foods may pay the put in cash, stock or a combination, at its choice.

The Austin, Texas company said the accreted value of the convertibles at March 2 will be $147 million.

The put price is $476.74 per $1,000 principal amount at maturity. Whole Foods noted that the price is equivalent to a conversion price of $44.81 per share or 10.64 shares per debenture. The stock closed at $48.14 on Monday.

"Given our strong stock price, we do not anticipate the debentures being put back to us; however, we are well positioned if circumstances should change," said John Mackey, chairman, president and chief executive officer of Whole Foods Market, in a news release. "We have a $220 million credit facility on which no amounts are currently drawn. If any or all of the debentures are put back to us, our convertible debt would be replaced with credit line debt resulting in no change to the amount of our total debt or our debt-to-equity ratio."

Whole Foods added that it has no immediate plans to call the convertibles.

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