Tower Automotive plans $110 million convertible sale to redeem 5% issue

By Ronda Fears

Nashville, May 4 - Tower Automotive Inc. said Tuesday it plans to sell new $110 million convertible notes to refinance its existing 5% issue before it matures in August. No further details were available in the convertible market.

The Novi, Mich.-based automotive components maker said it plans to use proceeds from the convertible offering along with borrowings under its senior bank facility to call its $200 million of 5% convertible notes due Aug. 1, 2004 ahead of the maturity date.

A refinancing of the 5% issue has been in discussions by the company for almost a year.

Last week in a conference call company executives talked about a refinancing plan that would include a new senior secured credit facility as well as a capital markets transaction, such as a new convertible, to repay its existing credit facility and refinance the 5% convertible.

The latest refinancing plan is expected to close some time in the second quarter. In June 2003, the company amended its bank facility to allow some flexibility toward redeeming the convertible early, but the call was never made. Then, Tower Automotive came under pressure due to earnings weakness in the last half of 2003.

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