Fleetwood Enterprises Inc. plans to offer $80 million worth of debt securities, to be repaid in 20 years, to repay other debt, for working capital and other general corporate purposes, the company announced today (Dec. 15).
Interest on the convertible senior subordinated debentures due in 2023 will be paid semiannually at a rate to be determined.
Net proceeds from the offering will be used to repay a portion of Fleetwood’s senior credit facility, and, depending on market and other business conditions, to repurchase or redeem a portion of its convertible trust preferred securities.
The debentures would be convertible, at the option of the holder prior to maturity, into shares of Fleetwood common stock at a conversion price to be determined.
The holders of the debt would be able to require Fleetwood to repurchase a portion or all of the debentures on the fifth, 10th or 15th anniversary dates of the issue at a price equal to 100% of the principal amount plus accrued and unpaid interest. Meanwhile, Fleetwood would have the option of using cash, the company’s common stock or a combination of cash and stock to repurchase the debentures.
The announcement of the debenture offering before the stock market opened today apparently contributed to Fleetwood’s stock price declining 64 cents, or 6%, to close at $9.56 a share in New York Stock Exchange trading.