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AV Homes to issue non-putable notes in exchange for $37.5 million of 7.5% convertibles due 2016
By Susanna Moon
Chicago, July 20 - AV Homes, Inc. said it began an exchange offer for $37.5 million principal amount of its outstanding 7.5% senior convertible notes due 2016.
In exchange, the company will issue new 7.5% senior convertible notes due Feb. 15, 2016 in separate, privately negotiated agreements, according to a company press release.
After the offer, $62.5 million principal amount of the original notes, issued Feb. 4, 2011, will remain outstanding.
The new notes will have an initial conversion rate of 55.5555 shares per $1,000 original principal amount of notes, which amounts to a conversion price of about $18.00 per share.
The initial conversion price represents a 23.6% premium over the company's stock (Nasdaq: AVHI) price of $14.56 on July 19.
But unlike the original notes, the new notes are not putable on Feb. 15, 2014. The cancellation of the existing put right extends the effective maturity date of the new notes to Feb. 15, 2016, the release noted.
The new notes are callable beginning Feb. 15, 2015. The notes may be convertible, at the company's option, if the stock closes at or above 130% of the conversion price for a specified period.
The issuer is a homebuilder based in Kissimmee, Fla.
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