Nova Chemicals holders will require redemption of 7% debentures

New York, July 23 - Nova Chemicals Corp. said that it had been informed by July 15 by the holders of all of its $150 million of outstanding 7% debentures that they planned to exercise their option to require that the company redeem the debentures at par on Aug. 15.

Nova, a Pittsburgh-based chemicals maker, said that it will fund the redemption from available cash. It said in its second-quarter earnings release that accordingly, these debentures were classified as current borrowings.

The company further said that on a pro forma basis, after giving effect to the repayment of $150 million on Aug. 15, Nova Chemicals' debt-to-total capitalization ratio would be 36.9%, and that if it were to net the cash remaining against debt, its total debt-to-capitalization ratio would be 30.1%.

EaglePicher receives sufficient consents in 9 3/8% '08 tender offer

New York, July 23 - EaglePicher Inc. (B3/B-) said that it received the necessary consents to proposed indenture changes from the holders of its 9 3/8% senior subordinated notes due 2008, as part of its previously announced tender offer for those notes, to execute a supplemental indenture incorporating those changes

The company said that the consent solicitation portion of the tender offer expired as scheduled at 5 p.m. ET on July 22, without extension, with EaglePicher having received tenders of notes and delivery of related consents from the holders of 95% of the notes.

It said that on that consent date EaglePicher, certain guarantors of the notes and The Bank of New York, as trustee, executed the supplemental indenture, although it will not become operative until the notes are accepted for purchase following the expiration of the tender offer, which is currently scheduled for Aug. 6, subject to possible extension.

As previously announced, EaglePicher - a Phoenix-based diversified manufacturer of industrial products and a wholly owned subsidiary of EaglePicher Holdings, Inc. - said on July 9 that it had begun the cash tender offer and related consent solicitation for any and all of its $220 million of outstanding 9 3/8% notes.

The company set a consent deadline of 5 p.m. ET on July 22 and an expiration date of 11:59 p.m. on Aug. 5, with both deadlines subject to possible extensions.

EaglePicher said that besides tendering for the notes, it was seeking consent from the noteholders to amend the notes' indenture to eliminate certain of the restrictive covenants and other contractual obligations, including the requirement that EaglePicher and certain of its affiliates provide periodic financial reports to the noteholders.

The company said that holders validly tendering their notes and delivering consents by the consent deadline - which has now expired - would receive total consideration of $1,000 per note (including a $10 per note consent payment), plus accrued and unpaid interest on the principal amount up to but not including the payment date.

Holders validly tendering their notes and delivering consents after expiration of the consent deadline would receive only the tender offer consideration of $990 per note, but no consent payment, as well as accrued interest.

EaglePicher said it planned to finance the tender offer and consent solicitation with the proceeds of a Rule 144A offering of approximately $220 million aggregate principal amount of new senior unsecured notes, together with other available funds (on July 21, the company announced plans to issue $220 million of new 10-year senior notes in a Rule 144A private placement offering).

Additionally, the company said it was negotiating a new senior secured credit facility of approximately $275 million to replace its current credit facility, which provided for an original term loan of $75 million, as amended, and a $220 million revolving facility.

EaglePicher said the tender is conditional upon, among other things, at least majority of the outstanding notes being tendered as well as the now-fulfilled condition of receipt of validly tendered consents from holders of a majority of the outstanding notes by the consent deadline.

It would also be conditioned upon the receipt by the company of sufficient proceeds from the planned offering of senior unsecured notes or other financing on acceptable terms to pay for the tender offer and consent solicitation and related expenses, and on the completion of EaglePicher's new senior secured credit facility.

UBS Securities, LLC is the dealer manager for the tender offer and consent solicitation (call collect at 203 719-4210); D.F. King & Co., is the information agent (call 800 697-6975).

Advanced Medical announces final 9¼% '10 notes tender results

New York, July 23 - Advanced Medical Optics, Inc. (B2) announced the final results of its previously announced "modified Dutch auction" tender offer for a portion of its outstanding 9¼% senior subordinated notes due 2010.

The company said that as of the expiration deadline at 12 midnight ET on July 18, a total of $177.640 million aggregate principal amount at maturity of the notes had been properly tendered, based on the final count by the tender offer depositary. It accepted for purchase a total of $115 million face value of the notes at a price of $1,150 per $1,000 principal amount, as previously outlined, for a total cost to the company of $132.25 million, plus an unspecified additional amount for accrued and unpaid interest up to the payment date.

With the offer to buy $115 million principal amount of the notes having been well over-subscribed, Advanced Medical Optics accepted for purchase at the full purchase price all $107.14 million principal amount of notes tendered by their holders at prices below that eventual purchase price under the terms of the modified Dutch auction process, and accepted for purchase on a pro-rated basis $7.86 million principal amount of the $70.5 million of notes tendered at the eventual purchase price, reflecting a pro-ration factor of 11.1489362%. Tenders made below the purchase price were not subject to pro-ration.

The company said that payment for all notes properly tendered and accepted for purchase, would be made promptly by the depositary for the tender offer, along with the return of all other notes tendered but not accepted for purchase.

As previously announced, Advanced Medical Optics, a Santa Ana, Calif.-based maker of ophthalmic surgical and eye care products initially said on June 18 that it would begin a "modified Dutch auction" tender offer for up $75 million aggregate principal amount of its $200 million of outstanding 9¼% notes (this offer amount was subsequently increased to $115 million).

Advanced Medical Optics initially said it would offer to purchase the notes for cash at a price of between $1,070 per $1,000 principal amount and $1,097.50 per $1,000 principal amount, plus accrued and unpaid interest up to, but not including, the date of purchase (the range of prices between which the company would purchase the notes was subsequently increased on July 1 to $1,120 to $1,150 per $1,000 principal amount, plus accrued interest).

It said that the final purchase price would be determined via a "modified Dutch auction" procedure, under which the company would accept tenders in the order of lowest to highest tender prices specified by tendering holders within the range. The company said that should the offer be over-subscribed, it would first accept for purchase all such notes tendered at prices below the purchase price; then it would accept for payment notes tendered at the purchase price on a pro rata basis from among such tendered notes. Notes tendered above the eventual purchase price would not be accepted.

The company said it expected to condition the tender offer on the closing of a private offering of convertible senior subordinated debt securities by Advanced Medical Optics, with the proceeds intended to fund consummation of the tender offer, as well as other conditions set forth in the official Offer to Purchase. However, it said that it did not expect the tender offer to be conditioned on any minimum principal amount of notes being tendered.

The company initially said that the offer would expire at 12 midnight ET on July 16, (the deadline was subsequently extended).

Advanced Medical Optics subsequently and separately announced later on June 18 that it had priced a private offering of $125 million of new 3.5% convertible senior subordinated notes due 2023, plus up to an additional $15 million of notes subject to the initial purchasers' option, and expected to close the offering on June 24 (the convertibles offer closed as scheduled). The company said it would use up to approximately $82.3 million of the net proceeds of the offering to repurchase the 9¼% notes as previously announced, with the remainder earmarked for general corporate purposes, which could include the repayment of other indebtedness and, from time to time, additional repurchases of the 9¼% notes. It said that the actual amount of the proceeds to be used in the tender offer would depend on the number of tenders the company actually received.

Morgan Stanley & Co. Inc. was exclusive dealer manager (U.S. investors call 800 624-1808; international investors call 212 761-1893). Mellon Investor Services LLC (call 877 698-6865) was information agent and Bank of New York was depositary in connection with the offer.

Corning to reduce debt with $366.75 million stock offering

New York, July 23 - Corning Inc. said it will use proceeds from its sale of 45 million shares at $8.15 per share to reduce debt.

The $366.75 million of stock was sold under the company's shelf registration via Goldman, Sachs & Co.

The Corning, N.Y. technology company said it will use proceeds to reduce debt through open market repurchases, public tender offers or other methods, and for general corporate purposes.

"A major part of our strategy for protecting the company's financial health has been to reduce debt levels," said James B. Flaws, Corning's vice chairman and chief financial officer, in a news release.

"Since 2001, we have retired more than $2 billion in debt obligations. With the proceeds from this offering, and our cash balances, we believe that we have adequate liquidity to fund our debt reduction objectives."

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