Magma accepts $26.69 million of 2% convertibles in exchange offer

By Angela McDaniels

Tacoma, Wash., Sept. 14 - Magma Design Automation, Inc. accepted $26,689,000 principal amount of its $49,939,000 outstanding principal amount of 2% convertible senior notes due May 15, 2010 in an exchange offer that expired on Sept. 4, according to a company news release.

In a prior news release announcing the preliminary results of the offer, the company said it expected to accept $26.7 million principal amount of the convertibles.

"With $63 million in cash and short-term investments we believe we have sufficient resources to retire the remaining balance of the notes not tendered in this exchange with either cash on hand or cash generated through the normal course of business," chief financial officer Peter S. Teshima said in the release.

"We may also utilize external financing options available to us toward note repurchase or strengthening of our product portfolio should this approach prove sufficiently attractive, but the successful final outcome of this note exchange allows us much greater financial and operational flexibility."

Holders received $1,000 principal amount of new 6% convertible senior notes due 2014 for each $1,000 principal amount of 2% convertibles plus accrued interest up to but excluding the settlement date, which was Sept. 11.

The conversion price of the new convertibles is $1.80 per share.

Magma announced amendments to the offer on Aug. 21. Before the changes, it had planned to exchange $900 principal amount of new convertibles for each existing convertible, and the coupon on the new convertibles was going to be 8%.

The company also extended the offer to Sept. 4 from Aug. 21. The offer began on July 27.

The offer was conditioned on the receipt of at least $35 million principal amount of 2% convertibles.

Credit Suisse Securities (USA) LLC (212 325-3399, attn: Magma Design Automation offering desk) was the dealer manager, and U.S. Bank NA was the exchange agent.

The company is a Santa Clara, Calif., maker of semiconductor design software.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.