The conversion rate corresponds to 125 per cent of the volume-weighted price of the CDON Group share over 20 trading days between the first day of trading in the share on 15 December 2010 and Friday 14 January 2011.
The conversion by MTG of the bond into a maximum of 6,578,947 CDON Group shares would increase the number of outstanding CDON Group shares from 66,342,124 at 31 December 2010 to 72,921,071, and result in a 9.0% dilution effect for CDON Group.
The CDON Group SEK 250 million five year convertible bond is unsubordinated and bears interest at 2.85 per cent per annum.
The convertible bond will initially be recognised at net present value on MTG’s balance sheet, together with the market value of the option to convert the bond into CDON Group shares. The resulting effect on the Group’s income statement will comprise the accrual of interest income at a level corresponding to a market interest rate (i.e. not the cash coupon rate). The option element of the bond will also be revalued at each balance sheet date with any change in value between the dates recognised as a non-cash item in the ‘net interest and other financial items’ line of the Group’s income statement.