Headwaters to issue 4.8 million shares in exchange for $19.8 million 2.875% convertibles

By Jennifer Chiou

New York, July 31 - Headwaters Inc. said it entered into privately negotiated exchange agreements with holders of its 2.875% convertible senior subordinated notes due 2016 to issue 4.8 million shares in exchange for $19.8 million of the convertibles.

The company said it will also pay accrued interest.

According to Headwaters, the exchanges came at a 25% discount to the par value of the convertible debt, resulting in an exchange value for Headwaters stock of $4.13 per share. The actual price per share used for the exchange was the volume-weighted average price on July 28, or $3.29 per share, less a 6% discount based on agreements.

Following the exchange, $71.8 million of the 2.875% notes will remain outstanding.

The notes have a put option in 2011.

Headwaters is a South Jordan, Utah-based provider of products, technologies and services to building products, coal combustion products and energy industries.

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