Northwest Airlines Corporation announced today that it intends to offer,
subject to market and other conditions, approximately $225 million
aggregate principal amount of Convertible Notes due 2023 through an
offering to qualified institutional buyers. The interest rate, conversion
rate and offering price are to be determined by negotiations between
Northwest and the initial purchasers of the notes.
Northwest stated that it expects to grant the initial purchasers a 30-day
option to purchase up to an additional $45 million principal amount of
notes.
Northwest plans to use the net proceeds of the offering for general
corporate purposes. Northwest also intends to use approximately $10
million of the proceeds to enter into call spread options on its common
stock to limit exposure to potential dilution from conversion of the notes.
In connection with the call spread options, the initial purchasers are
expected to take positions in Northwest`s common stock in secondary market
transactions and/or enter into various derivative transactions both in
anticipation of and after the pricing of the notes.
This announcement is neither an offer to sell nor a solicitation to buy
any of these securities.
The securities will not be registered under the Securities Act of 1933, as
amended (the “Securities Act”), or any state securities laws, and unless
so registered, may not be offered or sold in the United States except
pursuant to an exemption from the registration requirements of the
Securities Act and applicable state laws.
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