PMI to exchange 2.5% convertibles

By Jennifer Chiou

New York, July 3 - The PMI Group Inc. said it plans to exchange its 2.5% senior convertible debentures due 2021.

The company said it will issue new 2.5% senior convertible debentures due 2021 in exchange for the old 2.5% securities plus an exchange fee of $3.50.

The new notes would have an added net share settlement feature, which would allow PMI to pay for a portion of any conversion in cash.

In addition, it is expected that the new debentures would provide that PMI would eliminate its option to issue shares in lieu of paying cash if and when PMI repurchases new debentures at the option of holders or via a change of control.

The company said it filed a registration statement for the proposed exchange.

The PMI Group is a Walnut Creek, Calif.-based provider of credit enhancement products.

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