Summary
Lockheed Martin Corporation (LMT) filed an 8-K on June 2, 2008, to report an adjustment to the conversion rate of its $1 billion in Floating Rate Convertible Senior Debentures due 2033. This adjustment, effective June 3, 2008, increases the number of common stock shares issuable per $1,000 principal amount of debentures from 13.6528 to 13.7998. This change results in a decrease in the effective conversion price from approximately $73.24 to $72.46. Investors holding these convertible debentures should note this change as it impacts the potential equity upside associated with their investment. The press release announcing this adjustment is attached as an exhibit to this filing.
Key Highlights
- 1Adjustment to conversion rate for $1 billion in Floating Rate Convertible Senior Debentures due 2033.
- 2New conversion rate will be 13.7998 shares of common stock per $1,000 principal amount of debentures.
- 3Previous conversion rate was 13.6528 shares per $1,000 principal amount.
- 4The effective conversion price is adjusted from approximately $73.24 to $72.46.
- 5The adjustment is effective immediately prior to the opening of business on June 3, 2008.
- 6A press release detailing this change was issued on June 2, 2008, and filed as an exhibit.
Frequently Asked Questions
The main purpose of this 8-K filing is to publicly announce an adjustment to the conversion rate of Lockheed Martin's outstanding Floating Rate Convertible Senior Debentures due 2033.
The conversion rate is increasing, meaning debenture holders will receive more shares of LMT common stock for each $1,000 principal amount of debentures. This effectively lowers the conversion price, making the conversion option more attractive if the stock price rises, as it offers a greater potential for equity upside.
The new effective conversion price for the debentures is $72.46 per share of common stock.
The adjustment to the conversion rate is effective immediately prior to the opening of business on June 3, 2008.