8-KSecurities & ListingOther EventsExhibits & Filings

AFFILIATED MANAGERS GROUP, INC. 8-K Report, Unregistered Securities Sale (Aug 1, 2008)

Filed August 1, 2008For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) filed an 8-K on August 1, 2008, reporting on the unregistered sale of $400.0 million aggregate original principal amount of 3.95% Convertible Senior Notes due 2038. The sale, effective July 30, 2008, was made to Banc of America Securities LLC at 97% of the principal amount, with an option for an additional $60.0 million for over-allotments. This transaction was conducted under an exemption from registration requirements, indicating it was not a public offering. The notes are convertible under specific conditions, including if the stock price reaches certain thresholds relative to the conversion price or if the trading price of the notes falls below a specified percentage of the converted stock value. The initial conversion rate is set at 7.9586 shares per $1,000 principal amount, implying an initial conversion price of approximately $125.65 per share. The company retains the option to deliver cash, stock, or a combination thereof upon conversion. The issuance of these notes suggests the company is seeking to raise capital through debt that could convert to equity under certain market conditions.

Key Highlights

  • 1AMG issued $400.0 million of 3.95% Convertible Senior Notes due 2038.
  • 2The notes were sold to an initial purchaser (Banc of America Securities LLC) at a discount of 3% (97% of principal amount).
  • 3An over-allotment option for an additional $60.0 million of notes was granted.
  • 4The sale was conducted under Section 4(2) of the Securities Act, exempting it from registration requirements (private placement).
  • 5Notes are convertible under specific conditions related to stock price performance and note trading price.
  • 6The initial conversion rate is 7.9586 shares per $1,000 principal amount, implying an initial conversion price of ~$125.65 per share.
  • 7AMG has the discretion to settle conversions with cash, stock, or a combination.

Frequently Asked Questions

This 8-K filing announces Affiliated Managers Group's (AMG) unregistered sale of $400.0 million in 3.95% Convertible Senior Notes due 2038. It details the terms of the sale, conversion rights, and the exemption from registration.

The notes were sold pursuant to Section 4(2) of the Securities Act of 1933, which provides an exemption from registration requirements for transactions not involving a public offering. This implies the sale was made to a limited number of sophisticated investors.

Notes can be converted if the company's common stock price meets certain thresholds relative to the conversion price (e.g., 130% of the conversion price for 20 out of 30 days in a quarter), if the note's trading price falls below 98% of its converted stock value over five consecutive days, or upon specified corporate transactions or redemption.

The initial conversion rate is set at 7.9586 shares of common stock per $1,000 principal amount of notes. This equates to an initial conversion price of approximately $125.65 per share.