Titan plans sweetener to induce conversion of 5.25% convertibles

By Angela McDaniels

Seattle, Jan. 22 - Titan International, Inc. will offer an increased conversion rate to holders of its 5.25% senior convertible notes due 2009 who convert their notes during a conversion offer planned for February, according to a company news release.

Noteholders who convert during the offer will receive a conversion rate of 81.0 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of roughly $12.35 per share.

The notes are currently convertible at a rate of 74.0741 common shares per $1,000 principal amount of notes, which is equivalent to a conversion price of roughly $13.50 per share.

Titan's stock closed at $21.43 (NYSE: TWI) on Friday.

The company registered the shares to be issued in the exchange in an S-4 registration statement with the Securities and Exchange Commission on Thursday, and the offer will begin after the registration statement becomes effective.

As of Jan. 19, there were $81.2 million principal amount of the notes outstanding. If all of the notes are converted in the offer, Titan would issue 6,577,200 common shares.

Merrill Lynch & Co. will be the dealer manager for the conversion offer.

Quincy, Ill.-based Titan International is a holding company that owns subsidiaries that supply wheels, tires and assemblies for off-highway equipment used in agricultural, earthmoving/construction and consumer applications.

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