BWA BorgWarner Inc

AUBURN HILLS, Mich., April 9 /PRNewswire-FirstCall/ -- BorgWarner Inc. (NYSE:BWA), a global supplier of highly engineered automotive systems and components, primarily for powertrain applications, today announced that it has completed its previously announced public offering of 3.50% convertible senior notes due 2012 (the "notes"). The Company also announced that the underwriters fully exercised their option to purchase additional notes to cover over-allotments, resulting in a total sale of $373.75 million in aggregate principal amount of notes. BorgWarner estimates that the net proceeds of this offering will be approximately $362.2 million (including the exercise in full of the underwriters' over-allotment option), after deducting discounts and commissions and estimated expenses. BorgWarner intends to use approximately $25.2 million of the net proceeds of this offering to pay the net cost of the convertible note hedge and warrant transactions described below (which amount represents the cost of the convertible note hedge transactions, partially offset by the proceeds of the warrant transactions). BorgWarner expects to use the remaining proceeds for general corporate purposes, including the repayment of short-term indebtedness. In connection with the offering of the notes (including the exercise in full of the underwriters' over-allotment option), BorgWarner entered into convertible note hedge transactions with counterparties that are affiliates of the representatives of the underwriters of the notes. The convertible note hedge transactions are expected to reduce the potential dilution to BorgWarner's common stock upon conversion of the notes. BorgWarner also entered into warrant transactions with the counterparties. However, the warrant transactions could separately have a dilutive effect to the extent that the volume-weighted price per share of BorgWarner's common stock exceeds the applicable strike price of the warrants. Morgan Stanley, Merrill Lynch & Co., Citi and Deutsche Bank acted as joint book-running managers in connection with the offering. The offering was made under the Company's shelf registration statement filed with the Securities and Exchange Commission and only by means of a prospectus supplement and accompanying prospectus. A copy of the prospectus supplement and accompanying prospectus relating to each offering may be obtained from Morgan Stanley (address: Morgan Stanley & Co. Incorporated, 180 Varick St, 2nd Floor, New York, NY 10014, Attention: Prospectus Department; email: ; telephone: (866) 718-1649), Merrill Lynch & Co. (address: Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, New York, NY 10080, Attn: Prospectus Department), Citi (address: Citi, Brooklyn Army Terminal 140 58th Street, 8th floor, Brooklyn, New York 11220, Attn: Prospectus Department; telephone: (800) 831-9146) or Deutsche Bank Securities (address: Deutsche Bank Securities Inc., Attn: Prospectus Department, 100 Plaza One, Jersey City, New Jersey 07311, telephone: (800) 503-4611). This press release does not constitute an offer to sell or the solicitation of an offer to buy any notes or any other securities, nor will there be any sale of notes or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Statements contained in this news release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. Words such as "outlook," "expects," "anticipates," "intends," "plans," "believes," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. Such risks and uncertainties include: fluctuations in domestic or foreign vehicle production, the continued use of outside suppliers, fluctuations in demand for vehicles containing our products, changes in general economic conditions, and other risks detailed in our filings with the Securities and Exchange Commission, including the Risk Factors, identified in our most recently filed Annual Report on Form 10-K and in the prospectus relating to the offering. We do not undertake any obligation to update any forward-looking statements. DATASOURCE: BorgWarner Inc. CONTACT: Mary Brevard of BorgWarner Inc., +1-248-754-0881 Web Site: http://www.borgwarner.com/

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