The notes will be senior unsecured obligations of the company, convertible into shares of the company's common stock, once certain unspecified conditions are met, at a conversion price that represents a premium of approximately 27% over the closing market price. The notes will bear an approximate interest rate of just under 4.4% a year.
American Financial will use the net proceeds from the offering primarily to fund the acquisition of properties. Prior to investing the funds in acquisitions, the company intends to invest the proceeds in short-term marketable securities or in money market accounts.
American Financial trades on the NYSE under the ticker symbol AFR. AFR common stock opened trading on June 25 at $14 a share. The 52-week high, reached on Feb. 19, 2004, was $18.62 a share, and the 52-week low was $12.60 a share, set on May 10 of this year.
In an unrelated announcement, American Financial promotes Robert J. Delany from VP and director of acquisition finance to SVP of capital markets and corporate strategies. Delany developed strategies for the company's debt program, which included structuring more than $1.5 billion of debt, and assisted in the acquisition of more than $2 billion in assets, including pending transactions. Prior to joining American Financial, he was treasurer and director of finance for Fleet credit card services, and previously held positions with Ernst & Young, JP Morgan, CoreStates Financial, Advanta, and FleetBoston Financial.
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