Samsung 1999 Annual Report Download - page 62

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(D) denominated straight bonds -
On April 23, 1996, the Company issued straight bonds of 20,000 million at face value. The bonds bear interest at 3.3% per
annum and mature on April 23, 2003. The Company redeemed 5,210 million of these bonds during 1998.
(E) DM denominated straight bonds -
On December 16, 1996, the Company issued straight bonds of DM 300 million at face value. The bonds bear interest at 5.375%
per annum and mature on December 16, 2001.
(F) US$ denominated straight bonds -
On October 2, 1997, the Company issued straight bonds of US$100 million at 99.85% of face value. The bonds bear interest at
7.7% per annum and mature on October 1, 2027.
(G) US$ denominated straight bonds -
On October 2, 1997, the Company issued straight bonds of US$227 million at 93.11% of face value. The bonds bear interest at
7.45% per annum and mature on October 1, 2002. The Company redeemed US$74,135,000 of these bonds during 1998 and
1999.
(H) Convertible bonds -
On September 24, 1996, the Company issued foreign currency convertible bonds of US$150 million for the expansion of its
manufacturing facilities. The bonds are listed on the London Stock Exchange and will mature on December 31, 2006. A summary
of the terms of bonds is as follows:
Interest: 0.25% per annum payable annually in arrears on December 31.
Conversion period: On or after November 24, 1996 through December 15, 2006.
Conversion price: Subject to adjustment based on certain events, 65,499 per share, with a fixed exchange rate applicable to
the conversion of 827.3: US$1.00.
Redemption: Redeemable at the option of the bondholders on September 24, 2001 at 131.1% of the principal amount, and at
the option of the Company at any time on or after October 24, 1996 at a declining redemption price. However, no such
redemption may be made prior to September 24, 2001 unless the closing price of the Company’s common share has reached
135% of the conversion price for a stipulated period.
The Company recorded 51,969 million of consideration for conversion rights, the difference between nominal value and the
discounted present value at 5.796% guaranteed return rate, as an adjustment to debentures and shareholders’ equity related to
the issuance of foreign currency convertible bonds. The conversion rights account is amortized using the effective interest
method, and amortization of 668 million was recognized as interest expense during 1999.
During 1997, US$72,440,000 of convertible bonds were converted into 823,352 shares of common stock at the conversion price
of 72,784 per share.
During 1999, US$54,620,000 of convertible bonds were converted into 689,856 shares of common stock at the conversion price
of 65,499 per share. In relation to the conversion to common stock, the Company recorded 3,291 million as other capital
surplus, the difference between conversion right and related consideration for conversion rights (see Note 1).
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