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E*Trade to retire all 6.125% notes underlying its equity units
By Angela McDaniels
Tacoma, Wash., Nov. 13 - E*Trade Financial Corp. said it will retire all $450 million of its 6.125% subordinated notes due 2018.
The company will retire the notes in connection with the issuance of 25 million shares of common stock for $18 apiece, according to a company news release. The stock will be issued Tuesday.
The notes are a part of the equity units due Nov. 18, 2008 that E*Trade issued in November 2005. Each $25 unit consists of a purchase contract and a 2.5% beneficial ownership interest in $1,000 principal amount of the 6.125% notes.
The purchase contracts require the holders to purchase between 21 million and 25 million shares of common stock from the company by Tuesday.
As stipulated by the terms of the notes, E*Trade was required to attempt a remarketing to purchasers willing to pay par for the remarketed notes. The company said that as it expected, turmoil in the credit markets prevented a successful remarketing.
E*Trade is a financial services company based in New York.
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