Prof. Ian Giddy, New York University
New York, March 21, 2000 (Bloomberg) -- When John Brittain, treasurer at Nextel Communications Inc., was considering how to finance the company's expansion in January, he was faced with the option of selling stock or debt. He chose both.
With the Reston, Virginia-based wireless phone company's shares up four-fold in the past year, and the high-yield bond
market in the doldrums, Brittain opted to sell convertible bonds for a second time since June.
just a day's notice, Nextel issued $1 billion of
notes with a 5 1/4 percent interest rate -- more than
percentage points lower than the yield it paid on its most recent
junk bond sale in November.
``It made absolute sense,'' said Brittain.
NEXTEL COMMUNICATIONS INC filed this S-3/A on 06/16/2000.
SUBJECT TO COMPLETION, DATED JUNE 16, 2000
NEXTEL COMMUNICATIONS, INC.
5 1/4% CONVERTIBLE SENIOR NOTES DUE 2010
This prospectus relates to the offering of our 5 1/4% convertible senior notes due 2010 or the shares of our common stock issued upon conversion of the convertible notes (15,456,990 shares at the current conversion price). The selling security holders may offer the securities at fixed prices, at prevailing market prices at the time of sale, at varying prices or negotiated prices. We will not receive any cash proceeds from the selling security holders' sales of these securities.
The Convertible Notes
- Interest is payable on the convertible notes on each January 15 and July 15.
- Holders may convert the convertible notes into our common stock at any time before January 15, 2010 or the earlier redemption or repurchase of the convertible notes, at a conversion price of $74.40 per share, subject to adjustment in specified events. Changes in the conversion price, if any, and the number of shares issuable upon conversion as a result of any change, will be set forth in a supplement to this prospectus.
- On or after January 18, 2003, we may redeem any of the convertible notes at the redemption prices listed in this prospectus, plus accrued interest.
- There is currently no established market for trading in the convertible notes.
The Common Stock
- Our common stock is listed on the Nasdaq National Market under the symbol "NXTL."
- On June 15, 2000, the last reported sale price of our common stock was $62 13/16.
THE CONVERTIBLE NOTES: SUMMARY OF TERMS
SECURITIES OFFERED......... $1,150,000,000 principal amount of 5 1/4% convertible senior notes due January 15, 2010. See "V. Description of the Convertible Notes."
INTEREST................... 5 1/4% per year on the principal amount, payable semi-annually in arrears in cash on January 15 and July 15 of each year, beginning July 15, 2000. The first interest payment will include interest from January 26, 2000.
CONVERSION................. The convertible notes will be convertible into our common stock at the option of the holder at any time before redemption, repurchase or maturity at a conversion price of $74.40 per share, subject to adjustment in specified events. See "V. Description of the Convertible Notes -- C. Conversion of the Convertible Notes."
OPTIONAL REDEMPTION........ At any time on or after January 18, 2003, we may redeem the convertible notes. The initial redemption price is 103.500% of the principal amount, plus accrued interest. The redemption price will decline on January 15 of each year, beginning on January 15, 2004, as set forth in "V. Description of the Convertible Notes -- D. Optional Redemption by Nextel."
FUNDAMENTAL CHANGE......... Upon the occurrence of any "Fundamental Change," as described in this prospectus, and before the maturity or redemption of the convertible notes, each holder will have the right to require us to repurchase all or any part of that holder's convertible notes at a price equal to 100% of the principal amount of the convertible notes being repurchased, plus accrued interest. See "V. Repurchase at the Option of the Holder."
SINKING FUND............... None.
RANKING.................... The convertible notes will rank:
- equally with all of our other unsubordinated,unsecured indebtedness;
- junior to all of our secured indebtedness;
- junior to all liabilities of our subsidiaries
At March 31, 2000, we had $6.6 billion of indebtedness, and our subsidiaries had $7.0 billion of indebtedness and current liabilities.
NASDAQ SYMBOL FOR COMMON STOCK.................... NXTL.
For the complete prospectus see 10kwizard.ccbn.com.
are an investment advisor. Please explain to your client, an
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