BorgWarner Completes $373.75 Million Convertible Senior Note Offering Including Full Exercise of Underwriters' Over-Allotment Op
10 April 2009 - 6:19AM
PR Newswire (US)
AUBURN HILLS, Mich., April 9 /PRNewswire-FirstCall/ -- BorgWarner
Inc. (NYSE:BWA), a global supplier of highly engineered automotive
systems and components, primarily for powertrain applications,
today announced that it has completed its previously announced
public offering of 3.50% convertible senior notes due 2012 (the
"notes"). The Company also announced that the underwriters fully
exercised their option to purchase additional notes to cover
over-allotments, resulting in a total sale of $373.75 million in
aggregate principal amount of notes. BorgWarner estimates that the
net proceeds of this offering will be approximately $362.2 million
(including the exercise in full of the underwriters' over-allotment
option), after deducting discounts and commissions and estimated
expenses. BorgWarner intends to use approximately $25.2 million of
the net proceeds of this offering to pay the net cost of the
convertible note hedge and warrant transactions described below
(which amount represents the cost of the convertible note hedge
transactions, partially offset by the proceeds of the warrant
transactions). BorgWarner expects to use the remaining proceeds for
general corporate purposes, including the repayment of short-term
indebtedness. In connection with the offering of the notes
(including the exercise in full of the underwriters' over-allotment
option), BorgWarner entered into convertible note hedge
transactions with counterparties that are affiliates of the
representatives of the underwriters of the notes. The convertible
note hedge transactions are expected to reduce the potential
dilution to BorgWarner's common stock upon conversion of the notes.
BorgWarner also entered into warrant transactions with the
counterparties. However, the warrant transactions could separately
have a dilutive effect to the extent that the volume-weighted price
per share of BorgWarner's common stock exceeds the applicable
strike price of the warrants. Morgan Stanley, Merrill Lynch &
Co., Citi and Deutsche Bank acted as joint book-running managers in
connection with the offering. The offering was made under the
Company's shelf registration statement filed with the Securities
and Exchange Commission and only by means of a prospectus
supplement and accompanying prospectus. A copy of the prospectus
supplement and accompanying prospectus relating to each offering
may be obtained from Morgan Stanley (address: Morgan Stanley &
Co. Incorporated, 180 Varick St, 2nd Floor, New York, NY 10014,
Attention: Prospectus Department; email: ; telephone: (866)
718-1649), Merrill Lynch & Co. (address: Merrill Lynch, Pierce,
Fenner & Smith Incorporated, 4 World Financial Center, New
York, NY 10080, Attn: Prospectus Department), Citi (address: Citi,
Brooklyn Army Terminal 140 58th Street, 8th floor, Brooklyn, New
York 11220, Attn: Prospectus Department; telephone: (800) 831-9146)
or Deutsche Bank Securities (address: Deutsche Bank Securities
Inc., Attn: Prospectus Department, 100 Plaza One, Jersey City, New
Jersey 07311, telephone: (800) 503-4611). This press release does
not constitute an offer to sell or the solicitation of an offer to
buy any notes or any other securities, nor will there be any sale
of notes or any other securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction. Statements contained in this news release
may contain forward-looking statements as contemplated by the 1995
Private Securities Litigation Reform Act that are based on
management's current expectations, estimates and projections. Words
such as "outlook," "expects," "anticipates," "intends," "plans,"
"believes," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements are subject to risks and
uncertainties, many of which are difficult to predict and generally
beyond our control, that could cause actual results to differ
materially from those expressed, projected or implied in or by the
forward-looking statements. Such risks and uncertainties include:
fluctuations in domestic or foreign vehicle production, the
continued use of outside suppliers, fluctuations in demand for
vehicles containing our products, changes in general economic
conditions, and other risks detailed in our filings with the
Securities and Exchange Commission, including the Risk Factors,
identified in our most recently filed Annual Report on Form 10-K
and in the prospectus relating to the offering. We do not undertake
any obligation to update any forward-looking statements.
DATASOURCE: BorgWarner Inc. CONTACT: Mary Brevard of BorgWarner
Inc., +1-248-754-0881 Web Site: http://www.borgwarner.com/
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