Fleetwood buys back $50 million 6% convertible trust preferreds at discount

By Angela McDaniels

Seattle, July 28 - Fleetwood Enterprises, Inc. bought back 1 million shares of Fleetwood Capital Trust's 6% convertible trust preferred securities due 2029 from an institutional investor on Wednesday, according to an 8-K report filed with the Securities and Exchange Commission on Friday.

Fleetwood Enterprises paid $31 per share for a total of $31 million in cash, including accrued interest. The purchase price represented a 39% discount from the preferreds' stated liquidation amount of $50 per share.

The repurchase reduced the amount of preferreds outstanding by 24.8% and is expected to reduce the company's annual interest expense by about $3 million and increase shareholders' equity by almost $15 million, according to the filing.

The Riverside, Calif.-based producer of recreational vehicles and manufactured homes said it funded the repurchase with general working capital.

Fleetwood paid $61.2 million of outstanding distributions on the preferreds in February after deferring payment for 20 consecutive quarters.

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