Steinway issues $29 million 8¾% notes for stock

New York, Feb. 4 - Steinway Musical Instruments Inc. said it issued $29 million principal amount of its 8¾% senior notes due 2011 at a price of 106.3% of par in exchange for 1.271 million shares.

The notes were issued under the company's existing indenture.

The stock repurchased represents 14% of the company's outstanding shares. It was bought from an institutional shareholder by the Waltham, Mass., maker of musical instruments.

"We are pleased to report that we have completed a major repurchase of our common stock. We believe it is a significant display of confidence in the value of our business and its future prospects," said Steinway's chief executive officer Dan Messina in a news release.

"Since we were fortunate to complete this transaction in a highly favorable interest rate environment, we do not expect the additional debt to have a significant impact on our operations or financial flexibility."

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