Safeguard Scientifics investors put nearly all of 2.625% convertibles

By Susanna Moon

Chicago, March 24 - Safeguard Scientifics, Inc. said investors put $30.85 million of its $31.3 million outstanding 2.625% convertible senior debentures due 2024 at par on March 21.

The repurchase reduced the company's debt-to-equity ratio to 1:5 from 1:3 as of Dec. 31 and from 1:2 as of Dec. 31, 2009, according to a company press release.

The company issued $150 million of the 2.625% convertibles in 2004. From 2006 through 2009, the company repurchased $71.8 million at an average 21% discount to face value.

In March some Safeguard institutional investors exchanged $46.9 million of the 2.625% convertibles for a like amount of new 10.125% debentures due 2014 with an effective conversion price of $16.50.

"The repurchase improves Safeguard's financial strength and flexibility at a time when we are working with partner companies to drive aggressive growth, achieve solid risk-adjusted returns from well-timed exit transactions, and evaluate opportunities to deploy capital in more high-potential businesses," Peter J. Boni, president and chief executive officer, said in the release.

Safeguard said on March 4 that it expected holders to put the entire $31.3 million outstanding amount of the 2.625% convertibles.

The adjusted conversion price was $43.3044 per share. The company's common stock closed at $20.35 (NYSE: SFE) on March 3.

Safeguard Scientific is a technology incubator based in Wayne, Pa.

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