New York, Sept. 25 - TranSwitch Corp. said $90 million principal amount of its 4½% convertible notes due 2005 or 79% of the total outstanding were tendered in its exchange offer.
In total, TranSwitch will issue $74 million of new 5.45% convertible Plus Cash Notes due 2007 in exchange for the existing securities.
The Shelton, Conn. chipmaker also sold $24 million of new convertibles for cash to holders of the existing notes, up from $20 million originally announced.
The exchange offer expired at midnight ET on Sept. 24.
As previously announced, TranSwitch was offering $825 of the Plus Cash notes for each $1,000 principal amount of the existing convertibles.
The Plus Cash Notes will be convertible into 182.71 shares plus $500 in cash per $1,000 principal amount.
At TranSwitch's option the $500 in cash may be paid in stock if its shares are trading above $1.50.
By comparison, the existing notes convert at $61.9225.
TranSwitch may choose to force conversion of some or all of the notes if the stock that would be issued on conversion is valued at more than $1,000 per note or $5.47 for 20 out of 30 consecutive trading days. This feature has a make-whole provision for interest payments during the first two years.
Interest will be payable in cash or stock at TranSwitch's option but it can only pay in stock if its shares are trading above $1.50.
The new notes will be callable at par from two years onwards. The existing notes are callable from Sept. 12, 2003 onwards at a declining redemption price.
The two series of notes will rank equally in the capital structure.
U.S. Bancorp Piper Jaffray Inc. (contact Jeffrey Winaker at 415 984-5142 or Brian Sullivan at 415 984-5144) is the dealer manager for the exchange and placement agent for the new money offering. U.S. Bank NA is the exchange agent. The information agent is Georgeson Shareholder Communications Inc. (800 723-8038).
Terms of the new convertibles are:
| Issuer: | TranSwitch Corp.
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| Issue: | Convertible Plus Cash Notes
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| Amount: | $98 million ($74 million in exchange, $24 million for cash)
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| Maturity: | Sept. 30, 2007
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| Coupon: | 5.45% in cash or stock (for stock payment, uses price of 95% of closing level for 10 trading days ending two trading days before payment; stock payment only permitted if closing level for 10 trading days ending two trading days before payment is at least $1.50)
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| Conversion ratio: | $500 cash plus 182.71 shares (TranSwitch may pay cash portion in stock using price of 95% of closing level for 10 trading days ending two trading days before payment; stock payment only permitted if closing level for 10 trading days ending two trading days before payment is at least $1.50)
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| Conversion premium: | 11%
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| Auto-conversion: | TranSwitch may force conversion if stock closes above $5.47 for 20 out of 30 consecutive trading days.
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| Call: | After two years at par
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| Dealer manager for exchange, placement agent: | U.S. Bancorp Piper Jaffray Inc.
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