Q: Convertible debentures are coming due towards year end. What impact, if any, do you expect this may have other than possibly rolling them over to a higher rate and lower conversion price.
Thanks.
Thanks.
5i Research Answer:
The conversion price is $22.30, so voluntary conversion is not going to happen. The company could still redeem these for shares, as per the trust indenture, but we doubt this will occur as it would be highly dilutive. ARE has $359M current cash. We would just expect a redemption here and perhas a new issue to replace these at some point. In other words, we would not expect much overall impact.