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Magma Design Automation sets conversion price for notes offered in exchange for 2% convertibles
By Angela McDaniels
Tacoma, Wash., Sept. 3 - Magma Design Automation, Inc. said the conversion price of its new 6% convertible senior notes due 2014 will be $1.80 per share.
The company is offering up to $44,945,000 principal amount of the convertibles in exchange for its outstanding 2% convertible senior notes due May 15, 2010.
The company previously said the conversion price for the new convertibles would be the greater of $1.80 and 120% of the average of the volume-weighted average price of Magma's common stock for the five-trading-day period ended on Sept. 2.
The VWAP was $1.72, so $1.80 was selected as the conversion price, according to a company news release.
Holders who exchange will receive $1,000 principal amount of the 6% convertibles in exchange for each $1,000 principal amount of 2% convertibles.
Magma announced amendments to the offer on Aug. 21. Before the changes, it had planned to exchange $900 principal amount of new convertibles for each existing convertible, and the coupon on the new convertibles was going to be 8%.
The company also extended the offer to midnight ET on Sept. 4 from Aug. 21. It began on July 27.
The purpose of the exchange offer is to replace the convertibles due in 2010 with convertibles that mature in 2014 to improve Magma's financial condition.
The offer is conditioned on the receipt of at least $35 million principal amount of 2% convertibles.
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.
The company is a Santa Clara, Calif., maker of semiconductor design software.
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