Bell Microproducts exchanges 99.6% of 3¾% convertibles

New York, Dec. 20 - Bell Microproducts Inc. said it exchanged $109.6 million or 99.6% of its $110 million of 3¾% convertible subordinated notes due 2024.

The San Jose, Calif., distributor of data storage products announced the exchange on Nov. 16, saying it was making the offer in response to new accounting rules that will require it to treat the existing convertibles as if they were fully exchanged for stock when calculating diluted earnings per share.

The new convertibles are identical to the old ones except that on conversion Bell Microproducts will pay cash up to the principal amount and stock for the remainder. The existing notes convert into stock only.

In addition, Bell Microproducts raised the contingent conversion threshold to 130% for the new notes from 110% for the existing securities and added improved change-of-control protection through an increase in the conversion rate.

The notes were exchanged on a one-for-one basis.

No fee is being offered.

The exchange expired at midnight ET on Dec. 17.

Credit Suisse First Boston is dealer manager.

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