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NEW YORK (AFX) - Advertising and marketing organization Interpublic Group said Monday it is planning to secure a new source of stand-by liquidity and a new letter-of-credit facility, expected to total at least $526 million.
The multi-step transaction involves Interpublic and a special-purpose entity called ELF Special Financing Ltd. The company said the transactions are structured to minimize potential dilution to existing shareholders.
Interpublic will enter into a credit agreement with ELF, issuing warrants to ELF to purchase common stock at prices higher than the current market value.
ELF will sell those warrants, as well as three-year notes linked to the credit of Interpublic, as units in a private offering to institutional investors.
With the offering's proceeds, ELF will buy money-market instruments and hold them for Interpublic to borrow under the credit agreement.
The company said the size of the facility could grow by up to 15 percent beyond its expectation of $526 million if overallotment options are exercised.
The credit facility will remain outstanding until 2009.
Interpublic's shares closed down 14 cents at $9.53 on the New York Stock Exchange. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.
