- Free Writing Prospectus - Filing under Securities Act Rules 163/433 (FWP)
07 April 2009 - 8:26PM
Edgar (US Regulatory)
Filed Pursuant to Rule 433
Registration No. 333-149539
April 6, 2009
BorgWarner Inc.
$325,000,000
3.50% Convertible Senior Notes due 2012
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Issuer:
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BorgWarner Inc., a Delaware corporation (BorgWarner).
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Ticker/Exchange:
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BWA/The New York Stock Exchange.
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Title of Securities:
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3.50% Convertible Senior Notes due 2012 (the notes).
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Aggregate Principal Amount
Offered:
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$325,000,000 aggregate principal amount of notes
(excluding the underwriters option to purchase up to
$48,750,000 of additional aggregate principal amount of
notes).
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Denomination:
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$1,000 x $1,000.
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Proceeds Net of Any
Commissions Payable to the
Underwriters in Connection
with the Offering:
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Approximately $315,250,000 (without giving effect to any
exercise of the underwriters option to purchase up to
$48,750,000 of additional aggregate principal amount of
notes).
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Maturity:
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The notes will mature on April 15, 2012, subject to
earlier repurchase or conversion.
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Annual Interest Rate:
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3.50% per annum.
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Interest Payment Dates:
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Interest will accrue from April 9, 2009, and will be
payable semi-annually in arrears on April 15 and October
15 of each year, beginning on October 15, 2009.
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Day Count Convention:
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30/360.
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Issue Price:
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100%, plus accrued interest, if any, from April 9, 2009.
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Closing Stock Price:
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$25.74 on the New York Stock Exchange as of April 6, 2009.
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Initial Conversion Price:
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Approximately $32.82 per share of common stock.
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Initial Conversion Rate:
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30.4706 shares of common stock per $1,000 aggregate
principal amount of notes.
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Joint Book-Running Managers:
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Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Citigroup Global Markets
Inc. and Deutsche Bank Securities Inc.
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Trade Date:
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April 6, 2009.
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Expected Settlement Date:
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April 9, 2009.
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CUSIP Number:
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099724AF3.
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Listing:
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None.
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Convertible Note Hedge and
Warrant Transactions:
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The convertible note hedge transactions cover, subject to
customary anti-dilution adjustments, 9,902,945 shares of BorgWarners common stock. The warrants issued
to one or more of the underwriters or affiliates thereof
cover, subject to customary anti-dilution adjustments,
9,902,945 shares of BorgWarners common stock.
The cost to BorgWarner of
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the convertible note hedge
transactions, taking into account the proceeds to
BorgWarner of the warrant transactions, was $21,937,500.
If the underwriters exercise their over-allotment option
to purchase additional notes, the number of shares
underlying the convertible note hedge transactions will
automatically increase and BorgWarner expects to increase
the number of shares underlying the sold warrant
transactions as well, in each case on a pro rata basis.
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Fundamental Change:
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If BorgWarner undergoes a fundamental change (as defined
under Description of NotesFundamental Change Permits
Holders to Require Us to Purchase Notes in the
prospectus supplement relating to this offering, dated
April 6, 2009 (the Prospectus Supplement)), investors
will have the option to require BorgWarner to purchase
all their notes or any portion of the principal amount
thereof that is equal to $1,000, or an integral multiple
of $1,000. The fundamental change purchase price will be
100% of the principal amount of the notes to be purchased
plus any accrued and unpaid interest, including any
additional interest, to, but excluding, the fundamental
change purchase date. BorgWarner will pay cash for all
notes so purchased.
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Adjustment to Conversion
Rate upon a Make-Whole
Fundamental Change:
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The following table sets forth the numbers of additional
shares of BorgWarners common stock to be received per
$1,000 principal amount of notes upon conversion in
connection with a make-whole fundamental change based
upon hypothetical stock prices and effective dates as
specified:
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Stock Price
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Effective Date
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$25.74
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$26.00
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$28.00
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$30.00
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$35.00
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$40.00
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$50.00
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$60.00
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$70.00
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$80.00
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$90.00
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$100.00
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$110.00
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$130.00
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April 9, 2009
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8.3794
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8.1798
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6.8387
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5.7847
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3.9998
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2.9530
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1.8843
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1.3849
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1.1013
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0.9152
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0.7804
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0.6765
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0.5932
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0.4666
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April 15, 2010
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8.3794
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7.9909
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6.2199
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5.0701
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3.2062
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2.2043
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1.3048
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0.9455
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0.7560
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0.6331
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0.5431
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0.4729
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0.4160
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0.3288
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April 15, 2011
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8.3794
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7.9909
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5.5414
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4.1873
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2.1597
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1.2478
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0.6462
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0.4763
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0.3902
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0.3311
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0.2858
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0.2497
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0.2202
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0.1748
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April 15, 2012
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8.3794
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7.9909
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5.2437
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2.8627
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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The exact stock prices and effective dates may not be set forth in the table above, in which case:
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if the stock price is between two stock prices in the table or the effective date is
between two effective dates in the table, the number of additional shares will be
determined by a straight-line interpolation between the number of additional shares set
forth for the higher and lower stock prices and the earlier and later effective dates,
based on a 365-day year, as applicable;
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if the stock price is greater than $130.00 per share (subject to adjustment), no
additional shares will be issued upon conversion; and
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if the stock price is less than $25.74 per share (subject to adjustment), no additional
shares will be issued upon conversion.
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Notwithstanding the foregoing, in no event will the total number of shares of BorgWarners common
stock issuable upon conversion of notes exceed 38.8500 per $1,000 principal amount of such notes,
subject to adjustments in the same manner as the applicable conversion rate as set forth under
Description of NotesConversion Rate Adjustments in the Prospectus Supplement.
2
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
The issuer has filed a registration statement including a prospectus and a prospectus supplement
with the SEC for the offering to which this communication relates. Before you invest, you should
read the prospectus and prospectus supplement in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the issuer and this offering.
You may obtain these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus and the prospectus supplement if you request them by calling Morgan
Stanley at (866) 718-1649, Merrill Lynch & Co. at (866) 500-5408, Citi at (800) 831-9146 or
Deutsche Bank Securities at (800) 503-4611.
Any disclaimers or other notices that may appear below are not applicable to this communication and
should be disregarded. Such disclaimers were automatically generated as a result of this
communication being sent via email or another communication system.
3
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