Forest City Closes Offering of $250 Million Convertible Senior Notes
CLEVELAND, July 19, 2013
CLEVELAND, July 19, 2013 /PRNewswire/ --Forest City Enterprises, Inc. (NYSE:
FCEA and FCEB) today announced the closing of its offering of $250 million
aggregate principal amount of convertible senior notes due 2020 (the "Notes").
Forest City received net proceeds from the offering of approximately $242.5
million, after deducting the initial purchasers' discounts and estimated
The Notes, which were sold to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933, as amended (the "Securities Act"), will
pay interest semiannually at a rate of 3.625 percent per annum and the
offering price was 100 percent of their principal amount. The Notes are
convertible, at the holder's option, into shares of Forest City's Class A
common stock at a conversion rate of 41.3129 shares per $1,000 principal
amount of Notes, subject to adjustment in certain circumstances. This
conversion rate is equal to a conversion price of approximately $24.21 per
share, a 35 percent premium over the $17.93 closing price of Forest City's
Class A common stock on the New York Stock Exchange on July 15, 2013. The
Notes are general senior unsecured obligations of Forest City Enterprises,
The Notes are redeemable at Forest City's option, in whole or in part, at any
time up to August 15, 2018 at par plus accrued and unpaid interest, so long as
the Daily VWAP of Forest City's Class A common stock for at least 20 trading
days (whether or not consecutive) during any period of 30 consecutive trading
days ending within 5 trading days immediately prior to the date of the
redemption notice has equaled or exceeded 130% of the applicable conversion
price for the Notes on each applicable trading day, and, in whole or in part,
at any time from and including August 15, 2018 up to the maturity date at par
plus accrued and unpaid interest.
Forest City intends to use the net proceeds from this offering to repay the
outstanding balance of its 6.500% Senior Notes due 2017, and other outstanding
debt. Pending application of the net proceeds as described above, the net
proceeds of this offering will be held in an escrow account and invested in
short-term, investment-grade, interest-bearing securities.
The Notes and the shares of Forest City's Class A common stock issuable upon
conversion of the Notes have not been registered under the Securities Act, or
any state securities laws, and unless so registered, may not be offered or
sold in the United States except pursuant to an exemption from the
registration requirements of the Securities Act and applicable state laws.
This press release shall not constitute an offer to sell or a solicitation of
an offer to buy nor shall there be any sale of these securities in any state
or other jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state or other jurisdiction.
About Forest City
Forest City Enterprises, Inc. is an NYSE-listed national real estate company
with $10.6 billion in total assets. The company is principally engaged in the
ownership, development, management and acquisition of commercial and
residential real estate and land throughout the United States. For more
information, visit www.forestcity.net.
SOURCE Forest City Enterprises, Inc.
Contact: AT THE COMPANY, Robert O'Brien, Executive Vice President - Chief
Financial Officer, 216-621-6060, or Jeff Linton, Senior Vice President -
Corporate Communication, 216-416-3558
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