Reebok says 84.8% of 2% CoCo convertibles exchanged

New York, Nov. 24 - Reebok International Ltd. said holders exchanged $296.8 million, or 84.8%, of its $350 million of 2% convertible debentures due 2024.

The company started the exchange on Oct. 26 in response to the new rule on accounting for contingent convertible securities.

The Canton, Mass., footwear maker was offering new 2% convertible debentures due 2024 that will pay the principal amount in cash and the remainder in stock on exercise of the conversion option.

The new securities also have different call and put provisions. The hard call is pushed back to May 1, 2010 from May 1, 2009, with a soft call from May 1, 2009 onwards, subject to a 125% trigger.

In addition, the new convertibles have a put on May 1, 2010, as well as the existing puts on May 1, 2009, May 1, 2014 and May 1, 2019.

The exchange ran through midnight ET on Nov. 23.

As previously announced, under the accounting rules, Reebok will not be required to include any shares in its calculation of fully diluted shares outstanding until its stock price exceeds the conversion price. After that, it will only have to include the number of shares that would be issued. The Financial Accounting Standards Board's new rule requires that for the existing convertibles all shares that would be issued have to be included in the calculation of diluted earnings per share, even if the conversion option is not in the money and the conditions to conversion are not met.

Credit Suisse First Boston LLC is the dealer manager and MacKenzie Partners Inc. is the information agent (call 212 929-5000 (collect) or 800 322-2885).

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