RadioShack greenshoe fully exercised, lifts 2.5% five-year convertibles to $375 million

By Devika Patel

Knoxville, Tenn., Aug. 18 - Underwriters for RadioShack Corp.'s 2.5% five-year convertible senior notes exercised their over-allotment option in full for $50 million more of the convertibles, increasing the size of the issue to $375 million, the company said in an 8-K filed Monday with the Securities and Exchange Commission.

As previously reported, the company sold the notes at par on Aug. 12 in a Rule 144A deal, via joint bookrunners Citigroup and Banc of America Securities LLC and co-managers Merrill Lynch, Wachovia and Wells Fargo.

The notes have a conversion premium of 32.5% and a conversion price of $24.25 which equals a conversion ratio of 41.2414.

The notes are non-callable for life with no puts.

Of the proceeds, $40.1 million will be used to pay for the net cost of the convertible note hedge and warrant transactions that will raise the effective conversion premium from the company's perspective to 100%.

RadioShack will also use $100 million of the proceeds to buy back stock. The remainder will be used for general corporate purposes, including as working capital to replace the company's $300 million revolving credit facility, which expires in June 2009.

Based in Forth Worth, Texas, RadioShack is a consumer electronics goods and services retailer.

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