Magma Design expects to get $26.7 million 2% convertibles in exchange offer for 6% convertibles

By Susanna Moon

Chicago, Sept. 8 - Magma Design Automation, Inc. said it expects to accept $26.7 million principal amount of 2% convertible senior notes due May 15, 2010 in the exchange offer for up to $49,939,000 principal amount of its 6% convertible senior notes due 2014.

The amount is based on preliminary results of the offer that expired at midnight ET on Sept. 4. The offer began on July 27. The settlement date will be Sept. 10.

Holders who exchange will receive $1,000 principal amount of the 6% convertibles in exchange for each $1,000 principal amount of 2% convertibles.

The conversion price of the 6% convertibles due 2014 will be $1.80 per share. The conversion price was to be the greater of $1.80 and 120% of the average of the volume-weighted average price of Magma's common stock for the five-trading-day period ended on Sept. 2. The VWAP was $1.72.

Magma previously said the purpose of the exchange offer is to replace the convertibles due in 2010 with convertibles that mature in 2014 to improve Magma's financial condition.

The offer is conditioned on the receipt of at least $35 million principal amount of 2% convertibles.

Credit Suisse Securities (USA) LLC (212 325-3399, attn: Magma Design Automation offering desk) is the dealer manager. U.S. Bank NA is the exchange agent.

The company is a Santa Clara, Calif., maker of semiconductor design software.

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