Amdocs Ltd. (NYSE: DOX) had $1.3 billion in cash and short term investments at the end of 2008, though the sum will apparently be reduced soon as the firm buys back convertible notes from investors.
The billing software company issued the 0.5% coupon rate, convertible notes in 2004, raising $450 million. The notes, which mature in 2024, include a put option which allows investors to sell them back to Amdocs on March 16 in 2009, 2014, and 2019. The right requires Amdocs to repurchase all or any part of the investors' notes at a price equal to 100% of the principal amount plus accrued and unpaid interest.
Under the terms of the notes, Amdocs had the option to pay for the notes with cash, ordinary shares, or a combination of cash and ordinary shares, and has elected to pay for the notes solely with cash.
As of February 12, 2009, there was $331,800,000 aggregate principal amount of notes outstanding.
The notes are convertible into 23.1911 ordinary shares per $1,000 principal amount, subject to adjustment in certain circumstances.
RBC Capital Markets analyst Daniel Meron, in a review on Friday, said the move by Amdocs is not unexpected and will not have a major effect on earnings. He noted that Amdocs had already used $100 million of its credit line to buy back the bonds in 2008.
Shares in Amdocs closed down 0.84% on Friday on the New York Stock Exchange, giving a market cap of $3.82 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2009
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