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TranSwitch to exchange 5.45% convertibles due 2010 for new 2011 notes
By Jennifer Chiou
New York, Oct. 21 - TranSwitch Corp. announced that it entered into privately negotiated agreements on Tuesday under which it will issue new 5.45% convertible notes due Sept. 30, 2011 in exchange for all of its $10.013 million of outstanding 5.45% convertible notes due Sept. 30, 2010.
The company said it will issue an equivalent principal amount of the new series of notes.
The new notes will have a conversion price $0.90 of new notes per share, as compared to $1.83 per share for the old notes.
Interest is payable monthly.
Terms of the unregistered new notes provide for payment of principal on a monthly basis so that they will be paid down through September 2011. The old notes had a balloon payment of the entire principal amount at Sept. 30, 2010.
The new notes will be automatically convertible at any time if the company's common shares have traded over 150% of the conversion price for 20 consecutive trading days.
"We believe the terms of the debt refinancing demonstrate the confidence our convertible noteholders have in the 'New TranSwitch,' " Santanu Das, TranSwitch's president and chief executive officer said in a news release.
"With our improved operating performance, we felt it opportune to refinance our remaining long-term debt on similar terms with an extended maturity while providing flexibility in paying down the principal."
TranSwitch is a Shelton, Conn.-based maker of semiconductors used in voice, data and video communications network equipment.
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