Nortel Networks 8-K 2007
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
NORTEL NETWORKS CORPORATION
(Exact name of registrant as specified in its charter)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Item 8.01 Other Events
Nortel Networks Corporation (the Company) issued a press release announcing the pricing of the previously announced offering of US$1 billion aggregate principal amount of senior unsecured convertible notes (the Notes) to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the Securities Act), and in Canada to qualified institutional buyers that are also accredited investors pursuant to applicable Canadian private placement exemptions. The placement of the Notes is subject to customary closing conditions and is expected to close on March 28, 2007.
The Notes will consist of US$500 million principal amount of Senior Convertible Notes due 2012 (the 2012 Notes) and US$500 million principal amount of Senior Convertible Notes due 2014 (the 2014 Notes). The 2012 Notes will pay interest semi-annually at a rate per annum of 1.750% and the 2014 Notes will pay interest semi-annually at a rate per annum of 2.125%. The Company has granted the initial purchasers over-allotment options to purchase up to US$75 million principal amount of additional 2012 Notes and US$75 million principal amount of additional 2014 Notes. The Notes will be fully and unconditionally guaranteed by the Companys principal direct operating subsidiary, Nortel Networks Limited, and initially guaranteed by the Companys indirect subsidiary, Nortel Networks Inc. The Notes will be senior unsecured obligations and will rank pari passu with all other senior obligations of the Company.
The 2012 Notes and 2014 Notes will each be convertible into common shares of the Company at any time based on an initial conversion rate of 31.25 common shares per $1,000 principal amount of Notes (which is equal to an initial conversion price of $32.00 per common share), in each case subject to adjustment in certain events.
The Company expects that the net proceeds from the sale of the Notes will be approximately US$980 million (US$1.125 billion if the initial purchasers exercise in full their over-allotment options) and plans to use these net proceeds to redeem on or about September 1, 2007 at par a corresponding amount of its US$1.8 billion outstanding principal amount of 4.25% Convertible Notes due 2008. Pending this redemption, the Company plans to invest the net proceeds in money market instruments.
The Notes and related guarantees and any common shares issuable upon conversion of the Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold unless so registered except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable securities laws in other jurisdictions. The press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes and related guarantees or common shares issuable upon conversion of the Notes nor shall there be any sale of the Notes and related guarantees or common shares issuable upon conversion of the Notes in any jurisdiction in which such offer, solicitation or sale is unlawful. The press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 23, 2007