WILSONVILLE, USA: Mentor Graphics Corp. announced the pricing of a private placement of $20 million aggregate principal amount of its 6.25 percent Convertible Subordinated Debentures due 2026 to be issued to qualified institutional buyers in reliance on Section 4(2) of the Securities Act of 1933, as amended.
The company intends to use the net proceeds of approximately $19.9 million from the sale of the debentures for general corporate purposes.
The debentures will bear interest at 6.25 percent per annum. The debentures provide for a net share settlement and under certain circumstances may be convertible into cash (up to the principal amount of the notes) and, with respect to any excess conversion value, into cash, shares of common stock of the company or a combination of cash and shares of common stock at an initial conversion rate of 55.6545 shares per $1,000 principal amount of debentures.
At the initial conversion rate, the debentures will be convertible into common stock at a conversion price of approximately $17.97 per share.
The debentures are redeemable in cash in whole or in part at specified prices declining to 100 percent of the principal amount plus accrued and unpaid interest at the company’s option beginning on March 6, 2011, upon at least 20 days’ but not more than 60 days’ notice by mail to holders of debentures.
The holders of the debentures will have the ability to require the company to repurchase the debentures in cash in whole or in part on each of March 1, 2013, 2016 and 2021, and in the event of a fundamental change. In such case, the repurchase price would be 100% of the principal amount of the debentures plus any accrued and unpaid interest.