STMicroelectronics buys back further $120.8 million of zero coupon convertibles

Pittsburgh, May 28 - STMicroelectronics NV bought back $120.8 million of its outstanding zero coupon senior convertible bonds due 2010, in addition to the $186 million repurchased May 19, according to a press release.

The total amount repurchased was $306.8 million at a price of $796.30 per bond.

To date, STMicroelectronics has repurchased $1.9 billion of its 2010 bonds, or 92.28% of the bonds issued. Because less than 10% remain outstanding, the company plans to redeem the remaining outstanding bonds at the original purchase price plus accrued original interest discount through the redemption date.

The buybacks completed May 19 and at the market close May 27 will result in a loss on extinguishment of convertible debt of $4.1 million, incurred in the second quarter.

However, STMicroelectronics expects that the latest repurchases will reduce interest expenses by $4.4 million for the rest of 2004.

The Geneva chipmaker originally sold $1.4 billion of the securities in July and August 2003 to yield minus 0.5% with a 55% initial conversion premium.

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