WCI Communities switches 4% convertibles to net share settlement

New York, Dec. 16 - WCI Communities Inc. said it has amended its $125 million 4% contingent convertible senior subordinated notes due 2023 to use net share settlement in the event of a conversion or redemption.

Under the change, WCI will pay cash up to the principal amount and stock or cash for the remainder.

WCI had previously said it plans to modify the terms of its convertibles in response to the Financial Accounting Standards Board's new rules on accounting for this type of security.

As a result, the Bonita Springs, Fla., builder said it does not anticipate its 2004 and 2005 earnings will be affected by the change.

Under the terms of the rule, companies will have to treat contingent convertible securities as if they have been fully converted for earnings per share calculations, regardless of whether the conversion trigger has been hit.

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