EOP noteholders fail to block tender offer for 1995 notes; company extends deadline for two notes series

By Jennifer Chiou

New York, Jan. 9 - Equity Office Properties Trust's ad hoc committee of unsecured noteholders was unsuccessful in blocking the company's Dec. 26 tender offer and consent solicitation for notes issued under the 1995 indenture.

And the company announced it is extending the consent solicitation for its $8.4 billion of unsecured debt securities to 5 p.m. ET on Jan. 17 from Jan. 10 and before that Jan. 9 for the notes issued under the 1997 and 2000 indentures, for which a majority of noteholders had already signed a no-consent agreement.

EOP said Wednesday it received the necessary consents to amend its 1995 notes.

On Jan. 5, the committee said it was continuing to gather signatures on its no-consent agreement, despite EOP's announcement of a minimum of par on the notes.

The ad hoc committee previously said it believes that even under the amended terms, holders of 7.25% notes due 2028, holders of 7.50% notes due 2029 and holders of 7.875% notes due 2031 would not receive their full contractual entitlements.

The 15-member committee already held a conference call asking individual noteholders to sign the no-consent agreement to state that they will not provide their consent by EOP's early tender deadline.

Under EOP's amended tender offer and consent solicitation terms, the total consideration for each series of notes is subject to a minimum price of $1,000 per $1,000 principal amount of notes, according to a company news release.

EOP said the changes were made to ensure that investors have the opportunity to receive at least par for notes tendered on or prior to the consent payment deadline. The amendments were also made in response to changes in prices for U.S. Treasury securities since Dec. 26.

The total consideration includes a consent payment of $50.00 per $1,000 principal amount of notes other than internotes and a consent payment of $10.00 per $1,000 principal amount of the internotes identified in the offer to purchase.

The company also said that it received the required consents to amend its $1.5 billion of 4% exchangeable senior notes due 2026.

As already reported, the consent solicitation for the 4% notes is being conducted in connection with the company's previously announced merger agreement with affiliates of the Blackstone Group.

The proposed amendments eliminate substantially all of the restrictive covenants, eliminate some events of default and modify some provisions, including covenants related to mergers and consolidations.

The amendments also terminate the obligations of Equity Office and EOP under the registration rights agreement related to the notes, except for obligations to pay liquidated damages upon registration defaults and to indemnify holders in some situations.

Noteholders interested in viewing or signing the ad hoc committee's prepared agreement can call Rosenberg at Paul, Weiss, Rifkind, Wharton & Garrison LLP (212 373-3000).

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