BorgWarner Completes $373.75 Million Convertible Senior Note Offering Including Full Exercise of Underwriters' Over-Allotment Option
AUBURN HILLS, Mich., April 9 -- BorgWarner Inc. (NYSE: BWA), a global supplier of highly engineered automotive systems and components, primarily for powertrain applications, today announced that it has completed its previously announced public offering of 3.50% convertible senior notes due 2012 (the "notes"). The Company also announced that the underwriters fully exercised their option to purchase additional notes to cover over-allotments, resulting in a total sale of $373.75 million in aggregate principal amount of notes.
BorgWarner estimates that the net proceeds of this offering will be approximately $362.2 million (including the exercise in full of the underwriters' over-allotment option), after deducting discounts and commissions and estimated expenses.
BorgWarner intends to use approximately $25.2 million of the net proceeds of this offering to pay the net cost of the convertible note hedge and warrant transactions described below (which amount represents the cost of the convertible note hedge transactions, partially offset by the proceeds of the warrant transactions). BorgWarner expects to use the remaining proceeds for general corporate purposes, including the repayment of short-term indebtedness.
In connection with the offering of the notes (including the exercise in full of the underwriters' over-allotment option), BorgWarner entered into convertible note hedge transactions with counterparties that are affiliates of the representatives of the underwriters of the notes. The convertible note hedge transactions are expected to reduce the potential dilution to BorgWarner's common stock upon conversion of the notes. BorgWarner also entered into warrant transactions with the counterparties. However, the warrant transactions could separately have a dilutive effect to the extent that the volume-weighted price per share of BorgWarner's common stock exceeds the applicable strike price of the warrants.
Morgan Stanley, Merrill Lynch & Co., Citi and Deutsche Bank acted as joint book-running managers in connection with the offering.
The offering was made under the Company's shelf registration statement filed with the Securities and Exchange Commission and only by means of a prospectus supplement and accompanying prospectus. A copy of the prospectus supplement and accompanying prospectus relating to each offering may be obtained from Morgan Stanley (address: Morgan Stanley & Co. Incorporated, 180 Varick St, 2nd Floor, New York, NY 10014, Attention: Prospectus Department; email: prospectus@morganstanley.com; telephone: (866) 718-1649), Merrill Lynch & Co. (address: Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, New York, NY 10080, Attn: Prospectus Department), Citi (address: Citi, Brooklyn Army Terminal 140 58th Street, 8th floor, Brooklyn, New York 11220, Attn: Prospectus Department; telephone: (800) 831-9146) or Deutsche Bank Securities (address: Deutsche Bank Securities Inc., Attn: Prospectus Department, 100 Plaza One, Jersey City, New Jersey 07311, telephone: (800) 503-4611).
SOURCE BorgWarner Inc.
CONTACT:
Mary Brevard of BorgWarner Inc.,
+1-248-754-0881
Web Site: www.borgwarner.com
