Live Nation announced July 10th that it plans to offer $200 million in unsecured convertible notes due 2007, with earlybird buyers expected to get a 13-day option to purchase up to an additional $20 million in notes to cover any overallotments.
The notes may be converted into Live Nation common stock. A cash payout or combination of cash and stock will be subject to LN’s discretion and market conditions.
The notes will be offered in a private placement in the U.S. to qualified institutional buyers pursuant to rule 144A under the Securities Act of 1933.
The offering price, interest and conversion rate, circumstances in which a holder may convert its notes and other terms will be subject to negotiation between LN and the initial note buyers.
Convertible senior notes are generally convertible into stock once that stock reaches a certain price. However, LN’s stock price has dipped somewhat since hitting a closing high of $25.05 per share in February. It closed at $21.29 after the July 10th announcement, a drop of $1.72 per share or 9.25 percent from the prior day’s close.
Live Nation said in a statement it intends to use the net proceeds from the offering to repay debt under its credit facility and for general business purposes.