Magazine article ADWEEK

Omnicom Issues $550 Mil. in Convertible Bonds. (Finance)

Magazine article ADWEEK

Omnicom Issues $550 Mil. in Convertible Bonds. (Finance)

Article excerpt

Omnicom sold $550 million worth of 30-year, zero-coupon, zero-yield convertible bonds in the private-placement market last week.

The bonds are unregistered and not meant for sale to the public but, rather, to institutions. However, they can be registered in the future for sale to individual investors.

Omnicom said in a statement that the proceeds will be used to repay debt and for corporate purposes.

Convertible bonds can be converted into stock under certain conditions. Alexia Quadrani, a Bear Stearns analyst, said the conversion could be profitable for bond holders if Omnicom's stock trades above $103, a 43.6 percent premium over Monday's closing price of $71.75 on the New York Stock Exchange.

The issue is part of a recent wave of convertible bonds called "no-nos." They have no coupon, meaning they do not pay interest, nor are they issued at a discount from their redemption value. …

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