D-Link 2004 Annual Report Download - page 45

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17
D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
˙ Conversion price:
The conversion price was 50 New Taiwan dollars per share when the bonds were issued. On
July 19, 2004, the conversion price was adjusted to 27.76 New Taiwan dollars per share
based on the prescribed formula.
˙ Redemption right:
The bondholders may redeem their bonds within the first thirty to sixty days of the first,
second, third and the fourth year after the issuance date, at a redemption price equal to the par
value of the bonds at such dates. If more than 90% of the bonds have been converted to
common stock or redeemed by bondholders, D-Link has the right to redeem all the
outstanding bonds at a redemption price equal to their par value.
As of December 31, 2004, convertible bonds amounting to $31,750 thousand had been
converted, and they were fully converted in February 2005.
(3) The first issuance of domestic guaranteed straight bonds
˙ Par value: $600 million.
˙ Issue date: December 24, 2001.
˙ Issue price: at par value.
˙ Duration: three-years, maturing on December 24, 2004.
˙ Coupon rate: 2.65%, interest paid annually on December 24.
˙ Issue terms: The principal of the bonds will be fully paid at one time upon the maturity of the
bonds.[CORRECT INDENTATION AND LINE SPACING BELOW]
˙ Commitment: the bonds are guaranteed by the Chiao Tung Bank. D-Link’ s committed to
maintain a current ratio (current assets/current liabilities) over 150% and a debt ratio
(liabilities /equities) lower than 100%. These financial ratios should be determined based on
D-Link’ s audited financial statements.
On December 20, 2004, the bonds were fully paid.
Interest expense on bonds payable in 2003 and 2004 amounted to $75,496 thousand and
$103,706 thousand, respectively.
In 2003 and 2004, convertible bonds amounting to $412,378 thousand and $355,068 thousand,
respectively, were converted. The excess of the conversion price over the par value of the
certificates for conversion of the convertible bonds issued amounted to $270,719 thousand and
$229,953 thousand as of December 31, 2003 and 2004, respectively, and was included in capital
surplus in the accompanying consolidated balance sheets.