By Angela McDaniels
Tacoma, Wash., July 27 - Mentor Graphics Corp. issued $11,509,000 principal amount of 6.25% convertible subordinated debentures in exchange for an equal principal amount of its existing floating-rate convertible subordinated debentures plus a nominal cash amount, according to an 8-K filing with the Securities and Exchange Commission.
The company reached the exchange agreement on June 25. Plans for the exchange were announced on June 28, and it settled on July 27.
As previously reported, the company plans to issue up to $32,272,000 principal amount of the 6.25% convertibles in exchange for up to $32,272,000 principal amount of the floating-rate convertibles.
The cash amount will be individually negotiated with each participating holder.
All holders will also receive accrued interest.
The terms of the new debentures are substantially similar to the 2023 debentures, with the following exceptions:
• The new convertibles mature March 1, 2026 instead of Aug. 6, 2023;
• The new convertibles have a 6.25% coupon instead of a floating interest rate, which was 2.00313% since the last interest reset date of May 6; and
• The conversion price of the new convertibles is 55.6545 shares of common stock per $1,000 principal amount, representing a conversion price of approximately $17.97 per share. The conversion rate for the floating-rate convertibles is 42.7305, representing a conversion price of approximately $23.40.
The new convertibles are callable at 101.79 beginning March 6, 2011, at 100.89 beginning March 1, 2012 and at par beginning March 1, 2013.
The convertibles are putable at par on March 1, 2013, March 1, 2016 and March 1, 2021.
Mentor Graphics provides electronic hardware and software design solutions, products, consulting services and support for electronics and semiconductor companies. The company is located in Wilsonville, Ore.
| Issuer: | Mentor Graphics Corp.
|
| Issue: | Convertible subordinated debentures
|
| Amount: | $11,509,000
|
| Maturity: | March 1, 2026
|
| Coupon: | 6.25%
|
| Price: | Par
|
| Yield: | 6.25%
|
| Conversion ratio: | 55.6545
|
| Conversion price: | $17.97
|
| Call option: | At 101.79 beginning March 6, 2011, at 100.89 beginning March 1, 2012 and at par beginning March 1, 2013
|
| Put option: | At par on March 1, 2013, March 1, 2016 and March 1, 2021
|
| Pricing date: | June 25
|
| Settlement date: | July 27
|
| Stock symbol: | Nasdaq: MENT
|
| Stock price: | $9.76 at close July 27
|
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