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Kaman’s 3.25% notes continue to be convertible in second quarter
By Angela McDaniels
Tacoma, Wash., April 3 – Kaman Corp.’s 3.25% convertible senior notes due 2017 will continue to be convertible during the second quarter of 2017, according to a company news release.
The notes are convertible because the last reported sale price of Kaman’s common stock was greater than or equal to 130% of the conversion price for at least 20 trading days during the final 30 trading days of the quarter ended March 31.
Conversions will be settled in cash up to the principal amount, and any excess will be settled in cash, common stock or a combination thereof at Kaman’s election.
Kaman expects that any conversions will result in the exercise of a corresponding number of options under the privately negotiated convertible note hedge transactions entered into with several financial institutions in November 2010.
Kaman also entered into separate, privately negotiated warrant transactions with the option counterparties in November 2010. The company warned that these warrants could have a dilutive effect to the extent that the price of Kaman’s common stock upon exercise exceeds the strike price of those warrants (and to the extent that such warrants otherwise have option value in the case of any early unwind prior to their scheduled expiration commencing in February 2018).
The company has been advised that the option counterparties may modify their hedge positions with respect to the convertible note hedge transactions and warrant transactions by entering into or unwinding various derivative transactions and/or purchasing or selling Kaman’s common stock or other of Kaman’s securities in secondary market transactions from time to time (and are likely to do so during any observation period related to any conversion of the convertible notes).
Based in Bloomfield, Conn., Kaman makes proprietary aircraft bearings and components.
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