St. Mary Land to pay contingent interest on convertibles

New York, Jan. 27 - St. Mary Land & Exploration Co. said it the contingent interest provision has been triggered on its 5.75% convertible senior notes due 2022 for the period Sept. 15, 2002 to March 14, 2003, resulting in the coupon stepping up 50 basis points for that period.

According to a prospectus previously filed with the Securities and Exchange Commission, St. Mary Land assesses whether to pay contingent interest on the notes for each six-month period from March 15 to Sept. 14 and Sept. 15 to March 14., beginning with the period from Sept. 15, 2002.

The Denver, Colo. company is required to make the additional payment if the average trading price of the convertibles for the five trading days ending two trading days before the six-month period is 120% or more of the principal amount of the notes.

The contingent interest rate is set at the greater of the company's cash dividend on its common stock multiplied by the conversion rate of the notes and 5% of its borrowing rate for senior non-convertible debt with a similar maturity to the notes. However the rate is capped at 50 basis points.

St. Mary Land issued $100 million of the notes in March 2002, pricing them to yield 5.75% with a 30% initial conversion premium.

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