DOW JONES NEWSWIRES
Johnson Controls Inc. (JCI) will exchange its 6.5% convertible
senior notes due 2012 and its equity units as the auto-parts and
heating-systems maker looks to reduce its outstanding debt and
interest expense.
Late last month, Standard & Poor's Ratings Services took the
company off watch for downgrade, days after Fitch Ratings did the
same in the wake of the company's second-quarter results. Still,
S&P said it expects the company's results to continue to suffer
into the new fiscal year amid sharp cuts in auto production and
building construction.
Johnson Controls said it will exchange any and all of its
convertible notes for 89.3855 common shares - the amount the notes
were originally convertible into - plus $120 in cash and accrued
and unpaid interest per $1,000 of principal notes.
The company originally issued $402.5 million in the convertible
notes that were convertible into 89.3855 shares of common stock per
$1,000 principal amount of notes. Back then, the conversion would
have been worth $858.99, though now, because of a spike in the
company's stock price, it is worth about $2,246.26.
The company also said it will exchange up to 8.55 million
corporate units, or 95% of its outstanding equity units, for 4.8579
common shares, $6.50 in cash and accrued and unpaid interest on the
11.5% notes due 2042 that make up part of the units.
Johnson Controls' shares were down 1.3% at $25.07.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com