Not exactly: it's like borrowing from Visa to pay off Mastercard plus have some walking-around money, i.e. increase debt for immediate cash. SSO would have been compelled to redeem the notes for cash in March 2013. Also, the conversion price was at 43.33/share, so no hope there to issue shares to pay debt through redemption.
Share Price: Because the conversion price is based on the closing price at the time of the new issue, it's more advantageous to have the lowest share price to get the most shares-upon-conversion in the new notes. Whether the actions of large operators/mmakers/brokers can influence share price down to get lower conversion price if they roll over their old notes for the new notes I will leave to the speculations of the conspiracy theorists.
Overall, it's a better deal for holders of notes because of the much lower conversion price, plus if the interest rate is the same as previous notes, you get 4.5% interest in a 2% market.