he outstanding convertible note had an accreted value of us$ 80.7 million, which will be modified to be redeemed at us$ 61.1 million. CLS will make an immediate payment to IGT of us$ 39.7 million. Upon making this payment, the May 2007 convertible note will be terminated and a new convertible note will be issued.
The new convertible note will require payments of us$ 12.2 million, payable on the first anniversary of the issuance of the new convertible note and us$ 9.2 million, payable May 31, 2012. If CLS is unable to meet the new payment schedule, then it will be immediately required to pay us$ 86.3 million, less any payments previously made on the combined convertible notes.
IGT currently estimates that a charge of approximately us$ 21 million will be recorded in the fiscal fourth quarter of 2010 as a result of the convertible note modification.
The release of the lock up provision on IGT's investment in CLS equity is effective immediately, while the modification to the convertible note is subject to CLS receiving approval from the Stock Exchange of Hong Kong.