MINNEAPOLIS--(Business Wire)--ADC Telecommunications, Inc. (NASDAQ:ADCT) announced today the
pricing of $200 million in aggregate principal amount of Convertible
Subordinated Notes due 2015 and $200 million in aggregate principal
amount of Convertible Subordinated Notes due 2017 under an
automatically effective shelf registration statement filed with the
Securities and Exchange Commission (SEC) on December 18, 2007. In
addition, ADC granted the underwriters an option to purchase up to an
additional $25 million aggregate principal amount of the notes of each
series to cover over-allotments, if any. The 2015 notes and the 2017
notes will pay interest semi-annually at a rate of 3.50% per annum and
3.50% per annum, respectively. The notes are convertible into shares
of common stock of ADC, based on, in the case of the 2015 notes, an
initial base conversion rate of 37.0336 shares of common stock per
$1,000 principal amount of the 2015 notes and, in the case of the 2017
notes, an initial base conversion rate of 35.0318 shares of common
stock per $1,000 principal amount of the 2017 notes, in each case
subject to adjustment in certain circumstances. This represents an
initial base conversion price of approximately $27.00 per share in the
case of the 2015 notes and approximately $28.55 per share in the case
of the 2017 notes, representing a 75% and 85% conversion premium,
respectively, based on the closing price of $15.43 per share of ADC's
common stock on December 19, 2007. In addition, if at the time of
conversion the applicable stock price of ADC's common stock exceeds
the base conversion price, the conversion rate will be increased by up
to an additional 27.7752 shares of common stock per $1,000 principal
amount of 2015 notes and an additional 29.7770 shares of common stock
per $1,000 principal amount of 2017 notes, in each case as determined
pursuant to a specified formula. The notes of each series will be
subordinated to existing and future senior indebtedness of ADC.
ADC intends to use approximately $200 million of the net proceeds
of the offering to repurchase prior to maturity or repay at maturity
in June 2008 the outstanding $200 million aggregate principal amount
of its 1% Convertible Subordinated Notes due 2008. Any net proceeds
from the offering that are not used to repurchase or repay the 1%
Convertible Subordinated Notes due 2008 are expected to be used for
general corporate purposes and strategic opportunities, including
possible future acquisitions or investments in complementary
businesses, technologies or products. ADC may also use a portion of
the remaining net proceeds to repurchase prior to maturity or redeem,
on or after June 23, 2008, all or a portion of the outstanding $200
million aggregate principal amount of its Floating Rate Convertible
Subordinated Notes due 2013. The offering is expected to close on
December 26, 2007 and is subject to the satisfaction of customary
closing conditions.
Credit Suisse Securities (USA) LLC and Morgan Stanley & Co.
Incorporated are acting as joint book-running managers for the
offering. J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc. are
acting as co-managers for the offering. A registration statement
relating to these securities has been filed with the SEC. Copies of
the prospectus can be obtained from Credit Suisse Securities (USA) LLC
or Morgan Stanley & Co. Incorporated at the following addresses:
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Credit Suisse Securities (USA) LLC
Credit Suisse Securities Prospectus Department
One Madison Avenue
Level 1B
New York, NY 10010
Telephone: 1-800-221-1037
Morgan Stanley & Co. Incorporated
Prospectus Department
180 Varick Street, 2nd Floor
New York, NY 10014
Telephone: 1-866-718-1649
Email: prospectus@morganstanley.com
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About ADC
ADC provides the connections for wireline, wireless, cable,
broadcast, and enterprise networks around the world. ADC's innovative
network infrastructure equipment and professional services enable
high-speed Internet, data, video, and voice services to residential,
business and mobile subscribers. ADC has sales into more than 130
countries.
This announcement is neither an offer to sell nor a solicitation
of an offer to purchase convertible subordinated notes of ADC, nor
shall there be any sale of these securities in any state in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such state. ADC has filed a
registration statement with the SEC with respect to the offering. The
registration statement contains a prospectus for the offering and
other important information that should be read carefully before any
decision is made with respect the offering. The registration statement
is available at no charge on the SEC's web site at www.sec.gov.
Investors may obtain copies of the prospectus without charge by
requesting them from ADC Investor Relations, P.O. Box 1101,
Minneapolis, MN 55440-1101, Telephone: (952) 917-0991.
Cautionary Statement Regarding Forward Looking Information
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that
involve risks and uncertainties. Such forward-looking statements
include the expectations, plans and prospects for ADC, including
whether or not ADC consummates the offering of the notes and the
anticipated use of proceeds of the offering. The statements made by
ADC are based upon management's current expectations and are subject
to certain risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking
statements. These risks and uncertainties include those identified in
the section captioned "Risk Factors" in Item 1A of ADC's Annual Report
on Form 10-K for the year ended October 31, 2007, as may be updated in
Item 1A of ADC's subsequent Quarterly Reports on Form 10-Q or other
filings ADC makes with the SEC. ADC disclaims any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
ADC
Mark Borman, 952-917-0590 (Investor Relations)
Mike Smith, 952-917-0306 (Media Relations)
Copyright Business Wire 2007
