Regal-Beloit switches 2.75% convertibles to net share settlement

New York, Dec. 14 - Regal-Beloit Corp. said it amended the indenture for its $115 million principal amount of 2.75% convertible senior subordinated notes due 2024 in response to new accounting rules.

The Beloit, Wis.-maker of industrial electric motors and tools has changed the notes to net share settlement on conversion. Holders will now receive cash up to the principal amount of the notes with the remainder payable in cash, stock or a combination. Previously Regal-Beloit could pay the entire amount in cash, stock or a combination.

Regal-Beloit said it made the change so that it will not have to include the stock that could be issued on conversion of the principal amount in its calculation of diluted earnings per share. New accounting regulations for contingent convertible securities would have required it to do so, had it not amended the indenture.

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