Interpublic taps capped call options for 4.75% convertibles due 2023

By Susanna Moon

Chicago, April 8 - Interpublic Group of Cos., Inc. exercised the capped call options for its 4.75% convertible senior notes due 2023 and elected net share settlement, according to an 8-K filing with the Securities and Exchange Commission.

The company purchased capped call options in November 2010 to hedge the risk of price appreciation on the shares of its common stock into which notes due 2023 were convertible, the filing noted.

After the calculation period under the terms of the options on April 5, the option counterparties completed delivery of approximately 1.5 million settlement shares to the company, according to the filing.

The settlement shares have been eliminated from the company's outstanding common shares and their value recorded to the equity section of the company's consolidated balance sheet. These shares do not count against the limits established under the company's share repurchase program, the filing added.

Redemption of notes

The company said on March 15 that it retired all $200 million of the 4.75% convertibles, redeeming the remaining notes after holders elected to covert $199,997,000 of notes into about 16.9 million shares.

Noteholders could convert their notes into Interpublic shares through March 14 at a conversion rate of 84.3402 common shares per $1,000 principal amount.

Any notes not converted were redeemed on March 15 at par of $1,000 plus accrued interest of $23.75 per note.

The notes were also putable at the call price.

Interpublic is a global advertising and marketing company based in New York.

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