DST Systems swaps bonds

A $67 million bond swap today will help DST Systems Inc. manage its debt, an equity analyst says.

The deal involves bonds that owners can convert into DST shares in the future.

Bondholders also can require DST to pay off the bonds next August, according to a report from David Konig, with Robert W. Baird & Co.

DST’s swap replaces those bonds with new bonds that it won’t have to pay off until August 2014, which Konig said reduces DST’s refinancing risks.

Essentially all other terms remain unchanged. For example, both bonds allow the owner to convert the debt to stock at the price of $49.08 per share. DST shares are trading this morning at $42.40, up 23 cents a share.

According to Konig, DST still has $150 million of the original bonds outstanding, but also a credit line with $429 million available should it need the cash.