Alcatel-Lucent begins new consent solicitation for Lucent's 2.75% convertibles

By Angela McDaniels

Seattle, Dec. 15 - Alcatel-Lucent said it began a new solicitation of consents from holders of Lucent Technologies, Inc.'s 2.75% series A convertible senior debentures due 2023 and 2.75% series B convertible senior debentures due 2025 to amend the indenture governing the debentures on Friday.

The amendments would allow Alcatel-Lucent to provide the information, documents and other reports that it is required to file under the U.S. Securities Exchange Act of 1934 to the debentureholders instead of producing separate information, documents and reports for Lucent Technologies, according to a company news release.

If Alcatel-Lucent receives the required consents, the company said it will:

• Issue a full and unconditional subordinated guaranty of the debentures;

• Increase the interest payable on the principal amount of the debentures by 12.5 basis points per year;

• Provide a one-time upward adjustment to the conversion rate to 59.7015 American Depositary Shares for each $1,000 principal amount of series A debentures and to 65.1465 American Depositary Shares for each $1,000 principal amount of series B debentures; and

• Add a provision to the indenture that will increase the conversion rate if Alcatel-Lucent provides cash dividends or distributions on its ordinary shares of more than €0.08 per share per year.

Alcatel-Lucent needs consents from holders of a majority of each series of debentures.

The consent solicitation will expire at 1 p.m. ET on Dec. 29.

D.F. King & Co. (889 887-0082 or 212 269-5550 for banks and brokers) is the information agent for the consent solicitation, and Bear, Stearns & Co. Inc. (877 696-BEAR) is the solicitation agent.

The new consent solicitation supercedes the joint solicitation begun on Nov. 14, under which Alcatel and Lucent Technologies offered to pay a one-time consent fee for both series of securities equal to $7.50 times the fraction made up of the principal amount outstanding divided by the amount of accepted notes for each $1,000 principal amount.

Paris-based Alcatel-Lucent is a telecommunications equipment, software and services company.

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