Grainger to pay £35,000 per £100,000 principal amount to holders who convert 3.625% bonds

By Jennifer Chiou

New York, Oct. 24 - Grainger plc announced an offer to holders of its £112 million of 3.625% convertible bonds due 2014 under which it will pay a cash payment equal to £35,000 per £100,000 in principal amount of the bonds to those who convert their securities by noon ET on Nov. 4.

Grainger said that during the past few weeks, a number of bondholders have contacted the company to inquire whether it could assist them to enhance the liquidity of their investment in the bonds.

Upon conversion, bondholders will receive 11,574 ordinary shares per £100,000 principal of bonds.

The company priced the upsized notes on April 25, 2007. The size of the deal was originally £100 million.

The convertibles are non-callable for the first four years, after which they may be called subject to a hurdle at 130% of the conversion price.

For Grainger, the effect of this would be to reduce reported debt by £52 million and improve net assets on a pre-tax basis by the same amount if the whole issue were converted.

Deutsche Trustee Co. Ltd. is the trustee.

Grainger is a Newcastle upon Tyne, England-based residential property company.

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