Bowne holders put back $66.68 million 5% convertibles despite sweeteners

By Angela McDaniels

Tacoma, Wash., Oct. 2 - Bowne & Co., Inc. said holders of $66.68 million of its 5% convertible subordinated debentures due 2033 exercised their put options on Wednesday.

The company paid par in cash for the convertibles and used its $150 million revolving credit facility to fund the repurchase, according to an 8-K filing with the Securities and Exchange Commission.

Following the put, $8.32 million of the convertibles remain outstanding.

On Aug. 19, the company said it amended the terms of the debentures in order to make the put option less attractive.

Bowne added extended call protection by eliminating its ability to redeem the debentures until after Oct. 1, 2010 and added an Oct. 1, 2010 put option.

The company announced further amendments on Sept. 19, including increasing the interest rate to 6% through Oct. 1, 2010 and raising the conversion rate to 62.5 shares per $1,000 principal amount of debentures from 54.1126 shares - thereby cutting the conversion price to $16.00 per share from $18.48.

The amendments also included a make-whole provision for some fundamental changes, including certain consolidations or mergers that result in a change in control of the company during the period through Oct. 1, 2010.

Bowne is a document management company based in New York.

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