Headwaters plans net share settlement exchange for 2.875% convertibles

By Angela McDaniels

Seattle, Jan. 18 - Headwaters Inc. said it plans an exchange offer for its $172.5 million of 2.875% convertible senior subordinated notes due 2016 in an S-4 report with the Securities and Exchange Commission on Thursday.

The company will offer $1,000 principal amount of new notes plus an exchange fee of $2.50 for each $1,000 principal amount of outstanding 2.875% convertible senior subordinated notes due 2016.

The new notes will have terms similar to the terms of the old notes, except the new notes will have a net share settlement provision, a provision for payment of a make-whole premium upon conversion in certain circumstances and will have an altered definition of fundamental change.

No timing was given in the filing.

Morgan Stanley will be dealer manager.

Headwaters is based in South Jordan, Utah, and provides products, technologies and services to the energy, construction and home improvement industries.

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