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Symantec Makes $2 Billion Convertible Debt Offering
Doug Caverly
Staff Writer
2006-06-14
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Symantec has announced a $2 billion convertible debt offering, and it will use the proceeds to buy back about $1.5 billion of common stock. Symantec said it will issue separate stock-purchase warrants. The news caused RBC Capital Markets to raise its earnings for the security company.
Robert Breza, an RBC analyst, wrote that Symantec plans to use the takings for its share repurchasing plan, and for funding convertible note hedges that are intended to counterbalance the dilution of the company's common stock.
Breza raised his 2007 earnings estimate to $1.11 per share from $1.05, and upped his 2008 estimate to $1.33 per share from $1.22, saying that he was impressed by the change in Symantec's capital structure and its use of funds.
Symantec said it will release the $2 billion in convertible debt in two sections, with the first half, composed of roughly $1 billion in convertible notes, due in 2011. They will convert at $19.12 at a 22.5 percent conversion premium. The remaining notes will perform identically, but are due in 2013.
The RBC analyst is maintaining an "outperform" rating on Symantec's stock, as well as a $20 price target.
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About the Author:
Doug is a staff writer for SecurityProNews, InternetFinancialNews, SearchNewz, and WebProNews.
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