Analysis

STMicroelectronics Announced the Repurchase of a Portion of its Zero Coupon Senior Convertible Bonds due 2016

15th January 2010
ES Admin
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STMicroelectronics (NYSE: STM) today announced that it has completed a program to repurchase a portion of its outstanding Zero Coupon Senior Convertible Bonds due 2016 (“2016 Bonds”). A total of $298,174,000 nominal value of 2016 Bonds were repurchased representing approximately 30.6% of the total amount originally issued.
Beginning in December 2009, the 2016 Bonds were purchased in off market transactions by financial intermediaries, acting as agents for ST. The Company paid $314.6 million from outstanding cash to repurchase 2016 Bonds with an accreted value of $316.0 million. The repurchased Bonds will be cancelled in accordance with their terms.

The decision to repurchase a portion of the 2016 Bonds was taken in anticipation of the put option exercisable by bondholders on February 23, 2011 and optimizes ST’s liquidity management and yield through that date. “The repurchase of a portion of our 2016 convertible bonds with no need for refinancing demonstrates the strength of ST’s capital structure and reflects our confidence in the Company’s free cash-flow generation going forward,” said Carlo Ferro, Chief Financial Officer of STMicroelectronics.

The 2016 Bonds are listed on the Luxembourg Stock Exchange.

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