Cypress Semiconductor says it will settle 1% note conversions in cash

By Jennifer Chiou

New York, Aug. 14 - Cypress Semiconductor Corp. gave notice to U.S. Bank NA and holders that it has elected to settle conversions of its $28 million of 1% convertible senior notes due Sept. 15, 2009 in cash, according to an 8-K filed with the Securities and Exchange Commission.

The San Jose, Calif.-based semiconductor manufacturer said that its election to settle the notes by 100% cash conversion will result in no dilutive impact to share count after the current quarter.

The conversion rate is 177.2993 shares per $1,000 principal amount, which is equivalent to a conversion price of $5.64 per share. The company's shares closed at $10.78 on Aug. 12.

If all outstanding notes are converted at an assumed price per share of $10.78, Cypress will pay $53.5 million in cash to holders.

Assuming a $10.78 average share price during the 20 trading day averaging period beginning on Aug. 12 and assuming the outstanding call spread is settled on Sept. 15, about 4.4 million shares will be eliminated from the diluted share count for the calculation of earnings per share beginning in the fourth quarter.

The company issued $600 million of the notes in March 2007.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.