Magma Design to amend exchange offer for 2% convertibles due 2010

By Jennifer Chiou

New York, Aug. 21 - Magma Design Automation, Inc. announced that it intends to modify the terms of its offer to exchange all of its outstanding 2% convertible senior notes due May 15, 2010.

The company said it now plans to issue $1,000 of 6% convertible senior notes due 2014 in exchange for each $1,000 principal amount of 2% notes.

The conversion price for the exchange notes will be equal to the greater of $1.80 per share and 120% of the average of the volume-weighted average price of Magma's common stock for the five-trading-day period ending on Sept. 2.

Previously, Magma said it planned to issue up to $44,945,000 of 8% convertible senior notes due 2014.

As already reported, the purpose of the exchange offer is to replace the notes due in 2010 with exchange notes that mature in 2014 to improve Magma's financial condition. It had been planning to exchange $900 principal amount of the exchange notes for each $1,000 principal amount of tendered notes plus accrued interest to the closing date of the offer.

The exchange offer was to expire at 5 p.m. ET on Aug. 21 but will now end at midnight ET on Sept. 4. It began on July 27.

The offer is conditioned on tenders of at least $35 million principal amount of notes.

Credit Suisse Securities (USA) LLC (212 325-3399, attn: Magma Design Automation offering desk) is the dealer manager. U.S. Bank NA is the exchange agent.

Magma said on May 22 that it filed a form S-4 in anticipation of the planned offer.

The company is a Santa Clara, Calif., maker of semiconductor design software.

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