Qurate’s Liberty unit adjusts par amount of 2.25% convertibles

By Wendy Van Sickle

Columbus, Ohio, Jan. 2 – Qurate Retail, Inc. said the principal amount of subsidiary Liberty Interactive LLC’s 2.25% exchangeable senior debentures due 2046 was adjusted following payment of a quarterly interest payment to the holders as of Dec. 15.

The principal amount was lowered to $468.2728 from $471.247.

As of Dec. 31, about $208 million total principal amount remained outstanding, after giving effect to the quarterly interest payment.

Under the indenture for the debentures, the original principal amount of the debentures was reduced in an amount equal to each extraordinary additional distribution made to holders of the debentures.

Thereafter, the adjusted principal amount is further reduced on each successive quarterly interest payment date to the extent necessary to cause the quarterly interest payment to represent the payment of an annualized yield of 2.25% of the adjusted principal amount.

The latter adjustment, to the extent it is made by reason of a particular extraordinary additional distribution that results in a reduction to the principal amount of the debentures, takes effect on the second succeeding interest payment date after the payment of that extraordinary additional distribution.

To date, Liberty has made one extraordinary additional distribution to holders. On June 22, 2018, Liberty made an extraordinary additional distribution of $514.1295 per $1,000 original principal amount resulting from the payment of $53.75 per share to former holders of common stock of Time Warner Inc. on June 15, 2018 in connection with AT&T Inc.’s acquisition of Time Warner.

Reductions to the principal amount of the debentures do not affect the amount of the quarterly interest payments received by holders of the debentures, which will continue to be a rate equal to 2.25% per annum.

Liberty also announced the payment Thursday to holders of the debentures as of Dec. 15 of an excess regular cash dividend of $3.1601 per debenture, which is attributable to the regular quarterly dividends paid by AT&T of $0.51 on Nov. 1.

As a result of the acquisition, the reference shares attributable to each $1,000 original principal of debentures consist of 13.7452 shares of common stock of AT&T.

Englewood, Colo.-based Qurate Retail operates and owns interests in digital commerce businesses.

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