Yellow Roadway exchanges 96.41% of 3.375%, 99.06% of 5% CoCo convertibles

New York, Jan. 3 - Yellow Roadway Corp. said it completed its offer to exchange its $150 million 3.375% contingent convertible senior notes due 2023 and $250 million 5% contingent convertible senior notes due 2023.

Holders tendered $144.62 million or 96.41% of the 3.375% convertibles and $247.65 million or 99.06% of the 5% convertibles.

The company issued new notes on a one-for-one basis for the existing notes.

The new securities are identical to the old ones except that the principal amount of all conversions will be paid in cash with the remainder in stock and that the conversion rate will be increased in the event of a change in control.

The offer expired at 12:01 a.m. ET on Dec. 29.

Credit Suisse First Boston is dealer manager for the exchange. Morrow & Co. Inc. is the information agent (212 754-8000 or 800 607-0088).

Yellow Roadway said on Oct. 19 that it planned to offer new convertible notes in exchange for its two series of existing contingent convertible senior notes in response to the new accounting rules for contingent convertibles. It started the exchange on Nov. 30.

Settlement of the principal amount of the new convertibles is in cash, with the remainder in stock, a change that will decrease the dilutive impact of the notes, the Overland Park, Kan., trucking company said. If all holders accept the exchange, the number of additional shares to be issued on conversion - and included in accounting calculations - would fall to 1.3 million from the current 9.6 million, assuming a stock price of $48.00.

Yellow Roadway said the exchange is in response to the final decision by the Emerging Issues Task Force of the Financial Accounting Standards Board that companies must account for diluted earnings per share by including contingent convertible notes as if the notes were converted to common shares at the time of issuance. The company currently includes these potential shares only when the conversion triggers are reached.

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