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Convergys sets conversion price for convertibles to be issued in exchange offer for 4 7/8% notes
By Angela McDaniels
Tacoma, Wash., Oct. 5 - Convergys Corp. said the initial conversion price for its new 5¾% junior subordinated convertible debentures due 2029 is $12.0741, which is equal to 125% of the volume-weighted average price of the company's stock for the three business days ended Oct. 2.
The VWAP was $9.6593, and this is the "reference price" for the purposes of calculating the adjustment to the conversion rate applicable in the case of certain make-whole fundamental changes.
The company is offering up to $125 million principal amount of the convertibles in exchange for up to $122,549,019 of its existing 4 7/8% senior notes due 2009.
Holders will receive $1,020 principal amount of convertibles for each $1,000 principal amount of 4 7/8% notes tendered plus accrued interest up to but excluding the settlement date.
There was $192.6 million principal amount of the 4 7/8% notes outstanding as of Aug. 26.
If the offer is oversubscribed, notes will be accepted on a pro rata basis.
The new debentures will be convertible in certain circumstances into cash and common stock, and they will be callable at par beginning Sept. 15, 2019 if Convergys' stock closes at or above 150% of the conversion price for at least 20 trading days during any 30-trading-day period.
The offer is conditioned on the issue of at least $50 million principal amount of convertibles.
The offer began Sept. 9 and expires at midnight ET on Oct. 6.
J.P. Morgan Securities Inc. (800 261-5767 or 212 622-2781) is the dealer manager, U.S. Bank NA is the exchange agent, and D.F. King & Co., Inc. (800 290-6427 or 212 269-5550) is the information agent.
Convergys is a Cincinnati-based relationship management services company.
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