Comverse Technology exchanges 99.5% of ZYPS

New York, Jan. 26 - Comverse Technology, Inc. said it completed its exchange of its $420 million of contingent convertible senior notes in the Zero Yield Putable Securities (ZYPS) structure for new ZYPS, releasing final numbers that put the response at $417.7 million or 99.5%.

The new ZYPS have net share settlement.

The exchange was on a one-for-one basis with no exchange fee.

The new ZYPS are similar to the existing securities except that on conversion the company will pay cash up to the conversion value and stock for the remainder, there is an additional put for cash on May 15, 2009, the first call date is pushed back to May 15, 2009 from May 15, 2008 and any payment on a change of control will be in cash only.

Comverse said it carried out the exchange in response to new accounting rules from the Financial Accounting Standards Board on contingently convertible securities. For the new ZYPS, Comverse will not have to include any stock that would be issued on conversion until its stock price rises above the conversion price and then only for the new shares that would be issued.

The exchange expired at 12:01 a.m. ET on Jan. 21.

Lehman Brothers was dealer manager for the exchange.

Comverse is a Woodbury, N.Y., communications and information processing company.

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