Oil company Premier Oil is inviting holders of its guaranteed convertible bonds due 2014 to trade them in for similar bonds due in 2018.
The new bonds will have a conversion price of $7.00 and a coupon (interest rate) of 2.5%. This compares with the existing convertible bonds, which have a conversion price of $6.69 and a coupon of 2.875%.
The exchange will only go ahead if Premier gets enough takers in respect of $100m of the existing bonds. In order to participate in the exchange offer, a holder must validly offer for exchange at least $200,000 in aggregate principal amount of existing bonds.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The idea behind the exchange is to extend the maturity of the bonds while saving a few bob on the coupon and gaining on the conversion price. Premier had no comment on what the advantages might be to the holders of the existing 2014 bonds.
JH
-
Best-performing funds and investment trusts in stocks and shares ISAs of all timeAs ISAs celebrate their 26th birthday, we reveal the best-performing funds and investment trusts since stocks and shares ISAs launched in April 1999, and how much they would be worth today
-
Dividends: Reliability in uncertain timesDividends have formed over half of the total return of the UK market over the last 20 years. Dividend strategies have been under-appreciated while investors have focused on US mega cap technology. Income strategies may have more appeal in a tougher investment climate
