RadioShack Corporation To Offer $300 Million Convertible Senior Notes Due 2013

Franchising.com:

RadioShack Corporation announced today that it intends to offer, subject to market and other conditions, $300 million aggregate principal amount of its convertible senior notes due 2013 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In connection with the offering, RadioShack intends to grant the initial purchasers a 30-day option to purchase up to $50 million aggregate principal amount of additional notes solely to cover over-allotments, if any.

The notes will be convertible, subject to certain conditions, into cash and shares of RadioShack’s common stock, if any. The interest rate, conversion rate, offering price and other terms of the notes will be determined by negotiations between RadioShack and the initial purchasers of the notes.

RadioShack intends to use a portion of the net proceeds of this offering to pay the net cost of convertible note hedge and warrant transactions that it expects to enter into with affiliates of certain initial purchasers, which are referred to as the option counterparties. RadioShack also intends to use a portion of the net proceeds from this offering to repurchase shares of its common stock concurrently with the offering in privately negotiated transactions. RadioShack expects to use the remaining proceeds for general corporate purposes, including as a source of working capital to replace RadioShack’s $300.0 million revolving credit facility, which is scheduled to terminate in June 2009.