(Adds comments from treasurer, updates stock price.)
Pitney Bowes Inc. (PBI) announced an exchange offer for the $375
million of its voting preferred shares outstanding.
Holders are being offered face value, including a $3,000 early
premium per $100,000 of securities if tendered by 5 p.m. EDT Oct.
14, though that deadline is subject to change.
Treasurer Helen Shen said in an interview with Dow Jones
Newswires that the auction-rate preferred shares were sold three
years ago when that market was fully functioning. Auction-rate
securities are debt instruments whose interest rates are meant to
be reset periodically at daily, weekly or monthly auctions. But as
the auctions began failing in February 2008, interest rates rose
while investors were locked into long-term investments that had
been promoted as safe and liquid.
To boost liquidity to holders of its voting preferred shares,
Pitney Bowes is offering "a new security that has same terms and
conditions but something more standard and liquid" with the present
market, said Shen. "We view this as investor-friendly."
In July, Pitney Bowes posted an worse-than-expected 8.8% drop in
profit as revenue declined on the weak economic climate and the
stronger dollar. It also lowered it full-year outlook because it
didn't see any signs mail-intensive industries were turning around.
The company provides mail products and services.
Pitney Bowes shares were recently down 0.8% at $24.91 The stock
is down 2.2% this year.
- By Joan E. Solsman and Kevin Kingsbury, Dow Jones Newswires;
212-416-2291; joan.solsman@dowjones.com