ProZ.com global directory of translation services
 The translation workplace
Ideas
KudoZ home » English to Spanish » Finance (general)

make-whole payment

Spanish translation: pago complementario

Login or register (free and only takes a few minutes) to participate in this question.

You will also have access to many other tools and opportunities designed for those who have language-related jobs
(or are passionate about them). Participation is free and the site has a strict confidentiality policy.
GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
English term or phrase:make-whole payment
Spanish translation:pago complementario
Entered by: Ezequiel Fernandez
Options:
- Contribute to this entry
- Include in personal glossary

21:51 Oct 16, 2003
English to Spanish translations [PRO]
Bus/Financial - Finance (general) / finance
English term or phrase: make-whole payment
Holders of Series A shares will be entitled to receive US$54.32 per share... plus, in the case of the Series B preferred shares, a "make-whole" payment of US$ 2,45 per share.
Ezequiel Fernandez
Local time: 01:07
pago adicional por rescate anticipado
Explanation:
Buenos días, Larru.

Entiendo que se trata de un pago adicional (en efectivo) que se requiere para el rescate de acciones o pagarés antes de su fecha de vencimiento.

Espero te sirva como punto de partida para elegir la mejor traducción de este término.

Suerte,
Manuel
------------

Upon any Provisional Redemption, Level 3 will make an additional payment in cash (the "Make-Whole Payment") with respect to the notes converted into common stock between the date notice of redemption was given (the "Notice Date") and the Provisional Redemption Date. The Make-Whole Payment will be equal to the present value of the aggregate value of the interest payments that would thereafter have been payable on the notes on each semi-annual interest payment date from the Provisional Redemption Date through March 17, 2003. The present value will be calculated using the bond equivalent yield on U.S. Treasury notes or bills having a term nearest in length to that of the additional period as of the day immediately preceding the Notice Date.

http://www.bandwidthmarket.com/resources/sec/Level_3_Communi...

.----------------

Human Genome Sciences Bonds With Shareholders
I'm more interested in discussing HGS's bond maneuvers. The company called in two bonds this quarter, one issued last June, the other in December. Both had "make-whole" provisions that required HGS to pay about three years' worth of interest payments if it called the bond before those years were up. That's the reason for the $51 million charge this quarter.

Both bonds also were convertible, which means that the purchaser could elect to take shares of the company at a fixed price as payment for the bond in lieu of the principal. The price for the June offering was fixed at $26.10 per share, which was about a 30% premium on the stock price at the time. The December offering was fixed at $71.63, which represented a 22% premium.

Here are the terms of each bond:
Date Exp Size Rate ConvPrice Premium
6/99 6/07 $125M 5.5% $26.10 30%
12/99 12/07 200 5.0 71.63 22
If HGS had not called the bonds, they would annually have paid 5.5% and 5%, respectively, to the bond holders until 2007, at which time the holders could take the principal in cash or stock at the assigned rate. As it is, HGS called them early, paid the make-whole provision of three years' worth of interest, and everybody took stock rather than cash.

Consider the folks who bought the December bond. When HGS called the bond on March 2, the stock traded at $214.13. After holding a $1000 bond for three months, they got a $150 "make-whole" payment (that's a 60% annual return), plus they got 13.9616 shares worth $2990.

That's a 214% total return on a three-month investment -- in a bond!

Why did HGS call the bond so early and pay the penalty? Since its stock price had appreciated so much, HGS was able to issue two new convertible, callable make-whole bonds this quarter at the following, more favorable terms:
Date Exp Size Rate ConvPrice Premium
1/00 2/07 $225M 5.0% $112.50 16.02%
3/00 3/07 300 3.75 219.00 10.82
HGS has raised $850 million in bonds and has paid off $335 million for the total cost of $51 million plus expenses and stock. The bonds HGS has outstanding now are held at lower rates and have significantly higher conversion prices. That's pretty efficient money-raising.

There is a downside, however. HGS issued 2,792,292 shares -- about 9% of its float -- in the buyback of the December offering. What do you think the bondholders did when they got those shares? Note that the stock price dropped from $214.13 on the day the call was announced to $105 when it was completed March 22. Maybe it's just a coincidence that March 2 was near HGS' 52-week high. Other factors surely added to that fall. Still, the new shareholders who bought a bond probably contributed to the sell-off.

If the future plays out as HGS plans, these bonds will be the Similac that made this baby strong, and the short-term effect of the conversions will be a distant memory.

Related Links:
• HGS Discussion Board
• HGS home page
• Foolish Interview with Human Genome Sciences, Fool Specials, 3/6/00

http://www.fool.com/news/2000/hgsi000427.htm

Selected response from:

Manuel Cedeño Berrueta
Local time: 18:37
Grading comment
Gracias.
4 KudoZ points were awarded for this answer



Summary of answers provided
4pago adicional por rescate anticipadoManuel Cedeño Berrueta


  

Answers


11 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
pago adicional por rescate anticipado


Explanation:
Buenos días, Larru.

Entiendo que se trata de un pago adicional (en efectivo) que se requiere para el rescate de acciones o pagarés antes de su fecha de vencimiento.

Espero te sirva como punto de partida para elegir la mejor traducción de este término.

Suerte,
Manuel
------------

Upon any Provisional Redemption, Level 3 will make an additional payment in cash (the "Make-Whole Payment") with respect to the notes converted into common stock between the date notice of redemption was given (the "Notice Date") and the Provisional Redemption Date. The Make-Whole Payment will be equal to the present value of the aggregate value of the interest payments that would thereafter have been payable on the notes on each semi-annual interest payment date from the Provisional Redemption Date through March 17, 2003. The present value will be calculated using the bond equivalent yield on U.S. Treasury notes or bills having a term nearest in length to that of the additional period as of the day immediately preceding the Notice Date.

http://www.bandwidthmarket.com/resources/sec/Level_3_Communi...

.----------------

Human Genome Sciences Bonds With Shareholders
I'm more interested in discussing HGS's bond maneuvers. The company called in two bonds this quarter, one issued last June, the other in December. Both had "make-whole" provisions that required HGS to pay about three years' worth of interest payments if it called the bond before those years were up. That's the reason for the $51 million charge this quarter.

Both bonds also were convertible, which means that the purchaser could elect to take shares of the company at a fixed price as payment for the bond in lieu of the principal. The price for the June offering was fixed at $26.10 per share, which was about a 30% premium on the stock price at the time. The December offering was fixed at $71.63, which represented a 22% premium.

Here are the terms of each bond:
Date Exp Size Rate ConvPrice Premium
6/99 6/07 $125M 5.5% $26.10 30%
12/99 12/07 200 5.0 71.63 22
If HGS had not called the bonds, they would annually have paid 5.5% and 5%, respectively, to the bond holders until 2007, at which time the holders could take the principal in cash or stock at the assigned rate. As it is, HGS called them early, paid the make-whole provision of three years' worth of interest, and everybody took stock rather than cash.

Consider the folks who bought the December bond. When HGS called the bond on March 2, the stock traded at $214.13. After holding a $1000 bond for three months, they got a $150 "make-whole" payment (that's a 60% annual return), plus they got 13.9616 shares worth $2990.

That's a 214% total return on a three-month investment -- in a bond!

Why did HGS call the bond so early and pay the penalty? Since its stock price had appreciated so much, HGS was able to issue two new convertible, callable make-whole bonds this quarter at the following, more favorable terms:
Date Exp Size Rate ConvPrice Premium
1/00 2/07 $225M 5.0% $112.50 16.02%
3/00 3/07 300 3.75 219.00 10.82
HGS has raised $850 million in bonds and has paid off $335 million for the total cost of $51 million plus expenses and stock. The bonds HGS has outstanding now are held at lower rates and have significantly higher conversion prices. That's pretty efficient money-raising.

There is a downside, however. HGS issued 2,792,292 shares -- about 9% of its float -- in the buyback of the December offering. What do you think the bondholders did when they got those shares? Note that the stock price dropped from $214.13 on the day the call was announced to $105 when it was completed March 22. Maybe it's just a coincidence that March 2 was near HGS' 52-week high. Other factors surely added to that fall. Still, the new shareholders who bought a bond probably contributed to the sell-off.

If the future plays out as HGS plans, these bonds will be the Similac that made this baby strong, and the short-term effect of the conversions will be a distant memory.

Related Links:
• HGS Discussion Board
• HGS home page
• Foolish Interview with Human Genome Sciences, Fool Specials, 3/6/00

http://www.fool.com/news/2000/hgsi000427.htm



Manuel Cedeño Berrueta
Local time: 18:37
Works in field
Native speaker of: Native in SpanishSpanish
PRO pts in category: 44
Grading comment
Gracias.
Login to enter a peer comment (or grade)




Return to KudoZ list


KudoZ™ translation help
The KudoZ network provides a framework for translators and others to assist each other with translations or explanations of terms and short phrases.



See also: