Under Armour to exchange $169.1 million 1.5% convertibles

By Wendy Van Sickle

Columbus, Ohio, Aug. 19 – Under Armour Inc. entered into exchange agreements with some holders of its 1.5% convertible notes due 2024, according to a news release.

The noteholders have agreed to exchange $169.1 million, or 68%, of the outstanding $250 million convertibles for cash and shares of Under Armour's class C common stock, plus payment for accrued interest.

The number of shares of class C common stock to be issued to the noteholders will be determined based upon a volume-weighted average price per share of class C common stock during an averaging period starting Aug. 23.

Approximately $80.9 million of the convertibles will remain outstanding following the exchange. Under Armour's annual interest payments will be reduced by about $2.5 million.

Concurrently with entering into the exchange agreements, Under Armour entered into termination agreements relating to a portion of the capped call transactions that were previously entered into in connection with the issuance of the convertibles. Such termination agreements relate to a number of options corresponding to the number of convertibles subject to exchange under the exchange agreements.

Under Armour is a Baltimore-based marketer and distributor of athletic performance apparel.

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