Equity Office extends, sweetens tender after discussions

New York, Jan. 11 - Equity Office Properties Trust further sweetened the tender offer for its $8.4 billion notes and again extended the deadline after discussions with the ad hoc committee of unsecured noteholders.

For the 7.25% notes due 2028 and 7.50% notes due 2029, pricing will now be based on a spread of 25 basis points, narrowed from 70 basis points, while for the 7.875% notes due 2031 the pricing spread will be 60 basis points, also down from 70 basis points.

As before, there will be a minimum price of par for all series of notes.

The consent deadline is now 5 p.m. ET on Jan. 18, extended from 5 p.m. ET on Jan. 17.

Previously on Jan. 9, Equity Office announced it received the needed consents for the notes issued under the 1995 indenture but extended the consent solicitation from Jan. 10 and previously Jan. 9. For the remaining notes a majority of noteholders had already signed a no-consent agreement.

The ad hoc committee had previously said on Jan. 5 that it was continuing to gather signatures on its no-consent agreement, despite Equity Office's introduction of a floor of par for 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.

As previously announced, 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.

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