CARROLLTON, Texas-CellStar Corp., a provider of value-added logistics for wireless products, has registered to exchange half of its outstanding stock plus $20 million in cash to retire up to $150 million in convertible subordinated debt, the company said Sept. 4.
As filed with the Securities and Exchange Commission, the plan calls for the offer to begin by mid-October.
Saying the exchange offer “represents a substantial discount to the face value of the convertible subordinated notes,” Moody’s Investors Service Inc. downgraded the speculative grade rating of the affected debt to Ca from B2 Sept. 6.
“The company has been hurt by the severe deceleration in the global market for the sale of handsets which has compressed margins and by its exposure to emerging markets,” said Moody’s analysts Tom Marshella and Marcus C. Jones.
