Mentor Graphics issues bonds


Mentor Graphics issued $253 million in bonds, potentially making a sale of the company less attractive.

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Mentor Graphics issued $253 million in bonds, potentially making a sale of the company less attractive.

Mentor hopes to refinance its existing debt with the convertible bonds that will reduce its annual interest payment from 6.25% to 4%.

After Mentor announced its refinance plan last week, [billionaire investor Carl] Icahn sent the company a string of letters objecting to terms that convert its new debt to stock if the company is sold. Icahn, who owns almost 15 percent of Mentor’s shares, wrote that the bonds would dilute the value of current shareholders’ stock.

Today, Mentor said that at Icahn’s proposed buyout price — $17 a share — the new bonds reduce the value of the deal by 1.2 percent. An all-stock deal wouldn’t trigger the conversion, according to the company.

Read more at OregonLive.com.

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