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Meritor Announces Pricing Of Convertible Senior Unsecured Notes









TROY, Mich., Nov. 29, 2012 /PRNewswire/ -- Meritor, Inc. (NYSE: MTOR) today announced the pricing on November 28, 2012 of its offering of $225 million aggregate principal amount at maturity of convertible senior unsecured notes due 2026 (the "notes"). The offering is being made to qualified institutional buyers in a private placement. The notes will rank equally in right of payment to all of Meritor's existing and future senior unsecured indebtedness.

Meritor has granted to the initial purchasers of the notes a 30-day option to purchase up to an additional $25 million aggregate principal amount at maturity of the notes. The initial purchasers today exercised their option to purchase additional notes in full, bringing the total size of the offering to $250 million aggregate principal amount at maturity.  

The sale of the notes is expected to close on December 4, 2012, subject to customary closing conditions. 

The company will pay 7.875% cash interest on the principal amount at maturity of the notes semiannually on June 1 and December 1 each year, to holders of record at the close of business on the preceding May 15 and November 15, respectively, and at maturity to holders that present the notes for payment. Interest will accrue on the principal amount at maturity thereof from, and including, the date the notes are issued or from, and including, the last date in respect of which interest has been paid or provided for, as the case may be, to, but excluding, the next interest payment date. The notes have an initial principal amount of $900 per note and will accrete to $1,000 at December 1, 2020. The notes will mature on March 1, 2026.

The notes will be convertible in certain circumstances into cash up to the principal amount at maturity of the note surrendered for conversion.  For the remainder of Meritor's conversion obligation, if any, in excess of the principal amount at maturity, the notes will be convertible into cash, shares of Meritor common stock or a combination of cash and common stock, at Meritor's election, subject to certain limitations. The initial conversion rate, subject to adjustment, is equivalent to 83.3333 shares of common stock per $1,000 principal amount at maturity of notes. This represents an initial conversion price of approximately $12.00 per share. 

The company currently expects to use the net proceeds from the offering of the notes (estimated to be approximately $218 million, after giving effect to the exercise in full of the initial purchasers' option to purchase additional notes), after deducting estimated underwriting discounts and the company's expenses related to the offering, primarily to purchase, redeem or repay a portion of its outstanding debt, as well as for general corporate purposes.

The securities priced today have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any state in which such offer, solicitation or sale would be unlawful.

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