Tobacco Merchant Alliance One Wants to Sell $700 Million in New Notes

Source from:  Triangle Business Journal 06/23/2009

Morrisville-based tobacco merchant Alliance One International (NYSE: AOI) is looking to refinance its debt by offering $700 million in new notes. The company plans to sell $600 million in senior notes due in 2016 and $100 million in convertible senior subordinated notes due in 2014 to institutional investors. The sale is subject to market and other conditions. Alliance One has six series of notes coming due between 2011 and 2013 that it plans to repurchase with the latest offering, and may repurchase other notes not included in this offering. Alliance One also says it will repay its outstanding debt under a $305 million line of credit. The convertible notes can be converted at the option of the holders into shares of Alliance One common stock. To limit a stock price drop due to an influx of shares caused by the convertible notes, the company says it will use part of the proceeds from the sale to enter into "one or more convertible note hedge transactions with one or more of the initial purchasers of the Convertible Notes or their respective affiliates." The news was announced after the market's close on Monday. The company's share price remained steady during the day, closing down about 1 percent, to $4.14. Calls to Alliance One were not immediately returned. Enditem