headwaters calls off planned net share settlement exchange for 2.875% convertibles

By Angela McDaniels

Seattle, May 2 - Headwaters Inc. has indefinitely postponed a planned exchange offer for its $172.5 million 2.875% convertible senior subordinated notes due 2016, according to its 10-Q report for the second fiscal quarter filed with the Securities and Exchange Commission on Wednesday.

Under the planned offer, which was announced on Jan. 18, the company was going to offer $1,000 principal amount of new notes plus an exchange fee of $2.50 for each $1,000 principal amount of outstanding 2.875% convertibles.

The new notes would have terms similar to the terms of the old notes, except the new notes would have a net share settlement provision, a provision for payment of a make-whole premium upon conversion in certain circumstances and an altered definition of fundamental change.

Morgan Stanley was to be the dealer manager.

Headwaters is based in South Jordan, Utah, and provides products, technologies and services to the energy, construction and home improvement industries.

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