Extended Stay America tendering for 9.15% and 9 7/8% notes

New York, March 31 - Extended Stay America, Inc. (B2/BB-) said that it has begun cash tender offers to purchase any and all of its outstanding 9.15% senior subordinated notes due 2008 and its 9 7/8% senior subordinated notes due 2011 and is also seeking consents from the respective noteholders to proposed indenture amendments.

The company set consent deadlines of 5 p.m. ET on April 14 for its two offers and 8 a.m. ET on May 11 as the expiration times, with each deadline subject to possible extension

Extended Stay America, a Spartanburg, S.C.-based lodging company, said the tender offers and consent solicitations are being conducted in connection with its previously announced agreement to merge with affiliates of The Blackstone Group.

The total to be paid for each validly tendered 9.15% note will be $1,035.50 per $1,000 principal amount. That total includes a $30 per $1,000 principal amount consent payment for noteholders who tender their notes and thus deliver the related consents by the consent deadline.

The total consideration to be paid for each validly tendered 9 7/8% note will be determined at 2 p.m. ET on the second business day immediately preceding the tender offer expiration (for a tentative pricing date of May 7). The price will be determined by a formula based on a 50-basis point fixed spread over the yield at that time of the reference security, the 2% U.S. Treasury note due May 15, 2006. Total consideration for those notes will also include a $30 per $1,000 principal amount consent payment for holders tendering their notes and delivering their consents by the consent deadline.

Holders tendering their 9.15% notes or 9 7/8% notes after the consent deadline but before the tender offer expires will not receive the consent payment. All tendering holders will also receive accrued interest up to but not including the payment date for the notes.

Holders tendering their notes will be required to consent to the proposed amendments to the note indentures, which would eliminate substantially all of the restrictive covenants and shorten certain notice periods for the redemption of notes. Holders may not tender their notes without delivering consents or deliver consents without tendering.

The tender offers and consent solicitations are subject to certain conditions, including the company's receipt of consents sufficient to approve the proposed amendments. Another condition is that the previously announced merger with Blackstone's affiliates will have already occurred or will be occurring substantially concurrent with the tender offer expiration date.

Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Inc. will be the dealer managers for the tender offers and solicitation agents for the consent solicitations (contact Bear Stearns at 877 696-BEAR; contact Morgan Stanley at 800 624-1808). D.F. King & Co., Inc. is the information agent (bankers and brokers only call 212-269-5550; all others call 888 887-0082).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.