US Airways issues stock for $112 million of America West's 7.5% convertibles ahead of call

By Jennifer Chiou

New York, April 17 - US Airways Group, Inc. said it issued 3.86 million shares for about $112 million of America West Airlines, Inc.'s 7. 5% senior convertible notes due 2009 ahead of their redemption.

The company said holders of 99% of the notes elected to convert their securities rather than receive the cash payment in the call.

Prior to April 11, noteholders had the right to exchange each $1,000 principal amount of notes for 34.376 US Airways Group shares.

Other than a "modest" payment for accrued interest, the transaction does not result in a cash outlay for US Airways, the company said.

The notes were originally issued to aircraft lessors in January 2002 as part of America West's restructuring in exchange for rent reductions.

The call was announced on March 27 and holders who did not convert received $1,053.42 in cash per $1,000 principal amount of notes, which includes accrued interest up to but excluding the redemption date.

Following the exchange, the company has 86 million primary common shares outstanding.

On Oct. 28, US Airways exchanged 16 shares of US Airways Group stock per $1,000 principal amount at maturity for $250 million of America West's 7.25% senior exchangeable notes due 2023. It issued 4.2 million shares.

Tempe, Ariz.-based US Airways and America West's merger created the fifth largest domestic airline.

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