FWP
FILED PURSUANT TO RULE 433
REGISTRATION NO. 333-149539
April 6, 2009
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Immediate Release
Contact
Mary Brevard
248.754.0881 |
BORGWARNER ANNOUNCES $275 MILLION CONVERTIBLE SENIOR NOTE OFFERING
Auburn Hills, Michigan, April 6, 2009 BorgWarner Inc., a global supplier of highly engineered
automotive systems and components, primarily for powertrain applications, today announced that it
intends to offer and sell, subject to market and other conditions, approximately $275 million in
aggregate principal amount of convertible senior notes due 2012. BorgWarner also intends to grant
to the underwriters of the notes an option to purchase up to an additional $41.25 million aggregate
principal amount of the notes within the 13-day period beginning on the date notes are first issued
solely to cover over-allotments, if any. The offering of convertible senior notes is intended to
increase BorgWarners financial flexibility and strengthen its liquidity.
The notes will be general unsecured senior obligations of BorgWarner, will pay interest
semi-annually at a fixed rate, and will be convertible at any time
prior to the close of business on the second trading day preceding
the maturity date. Upon conversion, holders of the notes will receive, at the election of BorgWarner,
cash, shares of BorgWarners common stock or a combination of cash and shares. Holders of the notes
will have the right to require BorgWarner to repurchase for cash all or some of their notes upon
the occurrence of certain events. The interest rate, conversion rate and other terms of the notes
are to be determined by negotiations between BorgWarner and the underwriters.
In connection with the offering of the notes, BorgWarner expects to enter into convertible note
hedge transactions with one or more of the underwriters of the notes or their respective affiliates
(the hedge counterparties) and intends to use a portion of the net proceeds from the offering to
pay for the convertible note hedge transactions. BorgWarner also expects to enter into separate
warrant transactions with the hedge counterparties, which would result in additional proceeds to
BorgWarner.
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BorgWarner
Inc. Announces Convertible Senior Note Offering 2
In connection with the convertible note hedge and warrant transactions, the hedge counterparties
have advised BorgWarner that they or their affiliates may enter into various derivative
transactions with respect to BorgWarners common stock concurrently with or shortly after pricing
of the notes. These transactions could have the effect of increasing or preventing a decline in the
price of BorgWarners common stock concurrently with or following the pricing of the notes. In
addition, the hedge counterparties or their affiliates may from time to time, following the pricing
of the notes, modify their respective hedge positions by entering into or unwinding various
derivative transactions with respect to BorgWarners common stock or by purchasing or selling
BorgWarners common stock in secondary market transactions during the term of the notes (and are
likely to do so during any cash settlement averaging period related to the conversion of the
notes). These activities could have the effect of decreasing the price of BorgWarners common stock
and could adversely affect the price of the notes during any cash settlement averaging period
related to the conversion of the notes.
BorgWarner expects to use the net proceeds of the offering for general corporate purposes,
including to repay short-term indebtedness, after applying a portion of the net proceeds for the
cost of the convertible note hedges as offset by the proceeds of the warrant transactions, each as
described above.
If the underwriters exercise their option to purchase additional notes, BorgWarner will use a
portion of the net proceeds from the sale of the additional notes to increase ratably the number of
shares underlying the convertible note hedge transactions and expects the hedge counterparties to
increase ratably the number of shares underlying the warrant transactions, which would result in
additional proceeds to BorgWarner. BorgWarner expects to use the remainder of the net proceeds from
any sale of additional notes for general corporate purposes, including to repay short-term
indebtedness.
In connection with the offering, Morgan Stanley, Merrill Lynch & Co., Citi and Deutsche Bank are
acting as joint book-running managers.
The issuer has filed a registration statement including a prospectus and a prospectus supplement
with the SEC for the offering to which this communication relates. Before you invest, you should
read the prospectus and prospectus supplement in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the issuer and this offering.
You may obtain these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus and the prospectus supplement if you request them by contacting Morgan
Stanley (address: Morgan Stanley & Co. Incorporated, 180 Varick St, 2nd Floor, New York, NY 10014,
Attention: Prospectus Department; email: prospectus@morganstanley.com; telephone: (866) 718-1649),
Merrill Lynch & Co.
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BorgWarner
Inc. Announces Convertible Senior Note Offering 3
(address: Merrill Lynch, Pierce, Fenner & Smith Incorporated at 4 World Financial Center, New
York, NY 10080, Attn: Prospectus Department; telephone:
(866) 500-5408), Citi (address: Citi, Brooklyn Army Terminal,
140 58th Street, 8th Floor, Brooklyn, New York 11220, Attn: Prospectus
Department; telephone: (800) 831-9146) or Deutsche Bank Securities (address: Deutsche Bank
Securities Inc., Attn: Prospectus Department, 100 Plaza One, Jersey City, New Jersey 07311,
telephone: (800) 503-4611).
This press release does not constitute an offer to sell or the solicitation of an offer to buy any
convertible senior notes or any other securities, nor will there be any sale of convertible senior
notes or any other securities in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the securities laws of any such
state or jurisdiction.
# # #
Statements contained in this news release may contain forward-looking statements as contemplated by
the 1995 Private Securities Litigation Reform Act that are based on managements current
expectations, estimates and projections. Words such as outlook, expects, anticipates,
intends, plans, believes, estimates, variations of such words and similar expressions are
intended to identify such forward-looking statements. Forward-looking statements are subject to
risks and uncertainties, many of which are difficult to predict and generally beyond our control,
that could cause actual results to differ materially from those expressed, projected or implied in
or by the forward-looking statements. Such risks and uncertainties include: fluctuations in
domestic or foreign vehicle production, the continued use of outside suppliers, fluctuations in
demand for vehicles containing our products, changes in general economic conditions, and other
risks detailed in our filings with the Securities and Exchange Commission, including the Risk
Factors, identified in our most recently filed Annual Report on Form 10-K and in the preliminary
prospectus relating to the offering. In particular, the success of the offering described above
and the sale of the notes are subject to market and other conditions, not all of which are within
BorgWarners control. There is no assurance that BorgWarner will successfully complete the proposed
offering on the anticipated terms or at all. We do not undertake any obligation to update any
forward-looking statements.
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