Convergys plans to hold exchange offer for 4 7/8% notes due 2009

By Angela McDaniels

Tacoma, Wash., Aug. 27 - Convergys Corp. plans to offer up to $125 million principal amount of 5¾% junior subordinated convertible debentures due 2029 in exchange for up to $122,549,019 of its 4 7/8% senior notes due 2009, according to an S-4 filing with the Securities and Exchange Commission.

There was $192.6 million principal amount of the 4 7/8% notes outstanding as of Aug. 26.

Under the proposed terms, holders will receive $1,020 principal amount of convertibles for each $1,000 principal amount of 4 7/8% notes tendered. Holders will also receive accrued interest up to but excluding the settlement date.

If the offer is oversubscribed, notes will be accepted on a pro rata basis.

The new debentures will be convertible into cash and common stock. The initial conversion price will be the greater of $11.93 and 125% of the averaged volume-weighted average price of the company's stock for the three trading days ending on the second business day prior to the expiration date.

The new convertibles 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 will be conditioned on the issue of at least $50 million principal amount of convertibles.

The expiration date will fall sometime in September.

J.P. Morgan Securities Inc. will be the dealer manager, U.S. Bank NA will be the exchange agent, and D.F. King & Co., Inc. will be the information agent.

Convergys is a Cincinnati-based relationship management services company.

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