Tech Data Corporation Completes Sale of $325 Million 2.75% Convertible Senior Debentures19 Dec, 2006
Tech Data Corporation Completes Sale of $325 Million 2.75% Convertible Senior Debentures
CLEARWATER, FL - Tech Data Corporation, a leading distributor of IT products, today announced that it has completed the sale of $325 million in aggregate principal amount of Convertible Senior Debentures due 2026. The company has granted the underwriters an option to purchase up to an additional $25 million aggregate principal amount of the debentures to cover over-allotments, if any. The company intends to use the net proceeds from the sale of the debentures to repay short-term debt and for general corporate purposes.
The debentures will bear interest at a fixed rate of 2.75% per annum, payable semiannually beginning June 15, 2007. Commencing with the six-month period beginning December 20, 2011, the company also will pay contingent interest on the debentures in certain circumstances and in amounts described in the prospectus.
The debentures contain a net share settlement feature so that upon conversion, the company will deliver cash equal to the lesser of the aggregate principal amount of the debentures to be converted and the company's total conversion obligation, plus shares of the company's common stock, for the remainder, if any, of the conversion obligation, as detailed in the prospectus. The debentures may be converted, under certain circumstances, into cash, and shares, if any, of the company's common stock at an initial conversion rate of 18.4310 shares per $1,000 principal amount of the debentures (which is equivalent to an initial conversion price of $54.26 per share). The initial conversion price represents a 35% premium to the $40.19 per share closing price of the company's common stock on the NASDAQ Global Select Market on December 14, 2006.
On or after December 20, 2011, the company may redeem the debentures at a
redemption price equal to 100% of the principal amount of the debentures plus
accrued and unpaid interest. On December 15, 2011, December 15, 2016, December
15, 2021 and in the event of certain fundamental changes, holders may require us
to repurchase all or a portion of their debentures at a price equal to 100% of
the principal amount of the debentures plus accrued and unpaid interest.