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Stewart Information Services Corporation Message Board

  • smaycs4 smaycs4 Jan 23, 2013 6:08 AM Flag

    8k - exchanging 1 million + shares for $12.3 million in convertable notes

    it seemed excessive to swap $28 million worth of stock for $12.3 million in 6% notes and I dont recall the strike price of the covertables so I looked it up.

    $12.88.

    So, I guess it makes sense. They will no longer have to pay the 6% and there was no value lost.

    Makes me wonder though, if I should have bought the notes way back when instead of the stock ? I paid $9.06 for the stock.

    Clearly, in hindsight it seems they should have found cheaper financing back then rather than take on dilution over $12.88.

    Gotta wonder of the note holder hadnt already shorted his million shares antcipating eventual conversion.
    ------
    On January 17, 2013, Stewart Information Services Corporation (the “Company”) entered into an exchange agreement with an existing holder of the Company’s 6.00% Convertible Senior Notes due 2014 (the “Notes”) whereby the Company agreed to issue 1,006,711 shares of the Company’s common stock, par value $1.00 per share (“Common Stock”), and deliver cash for any accrued but unpaid interest on the Notes, in exchange for $12.3 million principal amount of Notes held by such holder. The transaction contemplated by the exchange agreement is scheduled to close on January 23, 2013. Following such exchange, an aggregate of approximately $52.7 million principal amount of the Notes will remain outstanding.

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