AES approaches - but doesn't yet reach - minimum tender in exchange offer

The AES Corp. (B3/B+) said on Wednesday (Nov. 27) that it has been informed by the exchange agent for its previously announced offer to exchange a combination of cash and new senior secured securities for up to $500 million of senior notes scheduled to come due in 2002 and 2003 that as of 5 p.m. ET on Tuesday (Nov. 26), approximately $219.193 million in aggregate principal amount of its outstanding 8¾% senior notes due 2002, or 73% of the outstanding amount had been tendered under the offer, as had approximately $157.851 million in aggregate principal amount of its 7 3/8% Remarketable and Redeemable Securities - ROARs - due 2013, or 79% of the outstanding amount.

AES indicated that it has not yet satisfied the minimum tender amount condition under the offer (tender of at least 80% of each note series), which is to expire on Dec. 3.

AS PREVIOUSLY ANNOUNCED, AES, an Arlington, Va.-based global independent power producer said on Oct. 3 that it had begun an offer to exchange the cash and new debt for its $300 million of outstanding 8¾% notes and its $200 million of outstanding 7 3/8% ROARS, which are putable in 2003.

AES said it would exchange $500 in cash and $500 principal amount of a new issue of 10% senior secured notes due 2005 per $1,000 principal amount of the existing 2002 notes( this mix was subsequently altered), and would exchange $1,000 principal amount of the new 10% notes per $1,000 principal amount of the ROARS. It additionally said it would pay an early tender bonus payment of $15 per $1,000 principal amount of the 2002 notes tendered and $5 per $1,000 principal amount of the ROARS tendered to holders who tender their notes prior to the early tender deadline (originally 5 p.m. ET on Oct. 25, which was subsequently extended, then waived, then restored, then waived again) and who do not subsequently withdraw such securities, assuming the exchange offer is consummated.

It said the exchange offer would expire at 5 p.m. ET on Nov. 8 (this deadline was subsequently extended). Tenders of the 2002 notes and the ROARs could be withdrawn at any time prior to the later of the early tender deadline and the time that AES announces that it has received valid and unwithdrawn tenders representing at least 75% in aggregate principal amount of the 2002 notes and the ROARS on a combined basis (the minimum participation percentages were later changed). In no event shall the latter time be later than the announced expiration date.

The company said that consummation of the exchange offer would be subject to a number of significant conditions, including (but not limited to) that valid and unwithdrawn tenders are received representing at least 75% in aggregate outstanding principal amount of the 2002 Notes and the ROARs on a combined basis; AES' concurrent entry into a new senior secured credit facility; the valid amendment of certain documentation executed in connection with the issuance of the ROARS in order to permit the completion of the exchange offer; and the absence of certain adverse legal and market developments.

AES said that the new senior secured notes being offered to the holders of the 2002 notes and the ROARS would be secured equally and ratably with all debt outstanding under the new senior secured credit facilities, by first-priority liens, subject to certain exceptions and permitted liens, on all of the capital stock of domestic subsidiaries owned directly by AES and 65% of the capital stock of certain foreign subsidiaries owned directly by AES and on certain inter-company receivables, inter-company notes and inter-company tax sharing agreements owed to AES by its subsidiaries. In addition, the new senior secured notes will be subject to a mandatory offer to repurchase with a portion of the net cash proceeds received from certain asset sales by AES.

The offering of the new senior secured notes in the exchange offer is being made only to "qualified institutional buyers" and "persons other than a U.S. person" located outside the United States under the definitions contained in Rule 144A and Regulation S of the Securities Act of 1933, as amended.

AES further said that concurrently, it was also launching a new multi-tranche $1.6 billion senior secured credit facility, which would be secured equally and ratably with the new senior secured notes. Consummation of the new senior secured facility would be subject to a number of conditions, including the completion of the exchange offer for the bonds and participation of all of its existing lenders.

On Oct. 28, AES said that it was extending the early tender deadline on its offer to 5 p.m. ET on Oct. 30, subject to possible further extension, from the original Oct. 25 deadline. On Oct. 31, AES said that it had again extended the early tender deadline to 5 p.m. ET on Nov. 1, subject to possible further extension, from the prior Oct. 30 deadline. On Nov. 4, AES said that it had waived the early tender deadline on the exchange offer, so that all holders validly tendering their notes by the Nov. 8 expiration deadline for the offer (which was subsequently extended) would be eligible for the applicable early tender bonus cash payment.

On Nov. 11, AES said that it had extended the exchange offer to 5 p.m. ET on Dec. 3, subject to possible further extension, from the previous Nov. 8 deadline, and had amended certain other terms of the exchange.

AES said that it had been informed by the exchange agent for the offer that, as of the old expiration deadline, approximately $16.863 million of its 2002 notes and $44.494 million of the ROARs had been tendered in the exchange offer, representing approximately 5.6% and 22.2% of the outstanding 2002 notes and ROARs, respectively.

The company modified the consideration it will pay to the holders of its 8 ¾% senior notes due 2002 to a mixture of $650 in cash and $350 in new securities per $1,000 principal amount of the old notes tendered (from $500 in cash and $500 in new notes previously).

The company had originally announced an early tender bonus to be paid in addition to the actual exchange consideration, with a separate, earlier deadline, for holders of the 8 ¾% notes and the 7 3/8% remarketable and redeemable securities ("ROARS") due 2013 that it is tendering for, but subsequently eliminated the earlier deadline, offering the bonus to all tendering holders. The Nov. 11 announcement restored the early tender deadline, setting it at 5 p.m. ET on Nov. 18; AES said that holders could withdraw their note tenders any time until that early deadline.

The previously announced respective early tender bonuses for the 8 ¾% notes and for the ROARS remained the same; however, AES said that holders tendering on or prior to the expiration date and not withdrawing such securities would still receive an incremental cash payment in the amount of $5 for each $1,000 principal amount 8¾% notes tendered and $5 for each $1,000 principal amount of ROARs tendered.

AES further said the consummation of the exchange offer would now be subject to the condition that 80% of the aggregate principal amount of the 8¾% notes and 80% of the aggregate principal amount of the ROARs be received and not withdrawn, a change from its original condition that 75% of the 8¾% notes and the ROARs on a combined aggregate basis be tendered.

On Nov. 19, AES said that it had again waived the early tender deadline (5 p.m. ET on Monday Nov. 18) in connection with its exchange offer. The company said that holders tendering their notes by the scheduled tender offer expiration deadline (5 p.m. ET on Dec. 3) and not withdrawing such securities would all be eligible to receive the previously announced early tender bonus payment of $15 per $1,000 principal amount of its 8¾% senior notes due 2002 and $5 per $1,000 principal amount of its 7 3/8% remarketable and redeemable securities - ROARS - due 2013, assuming the exchange offer is consummated.

Arch Wireless calls some 10% '07 notes for redemption

Arch Wireless, Inc. said on Wednesday (Nov. 27) that its wholly owned subsidiary, Arch Wireless Holdings, Inc. had notified The Bank of New York, as trustee, of its intention to redeem, at par value, $35 million principal amount of the company's 10% senior subordinated secured notes due 2007 on Dec. 31, with a record date for the transaction of Dec. 16.

Arch also disclosed that the company had completed a mandatory redemption payment of $15 million, plus accrued interest, on Nov. 15, bringing the amount of the remaining outstanding notes down to $145 million from $160 million previously. It said that upon the completion of the planned $35 million redemption on Dec. 31, Arch will have redeemed $90 million of the $200 million of the bonds which were originally issued on May 29, after Arch's financial restructuring was completed. The $90 million would include the $35 million being redeemed on Dec. 31, the $15 million November redemption and the $40 million total redeemed in three separate previously announced transactions which took place in July, August and September. Following the Dec. 31 redemption, Arch will have $110 million of the notes remaining outstanding.

AS PREVIOUSLY ANNOUNCED, Arch Wireless - a Westborough, Mass.-based provider of wireless messaging and mobile information services - said on May 29 that its First Amended Joint Plan of Reorganization, which had been confirmed by the U.S. Bankruptcy Court for the Western Division of Massachusetts on May 15, officially became effective, thus marking the formal emergence from Chapter 11 of Arch and its subsidiaries. As part of that reorganization, Arch Wireless Holdings issued $200 million principal amount of new 10% notes and $100 million principal amount of new 12% subordinated secured compounding notes due 2009, while the parent company issued 20 million shares of new common stock. The new shares and notes were issued in full satisfaction, release, discharge and cancellation of all claims against Arch and its subsidiaries based on transactions or occurrences prior to Dec. 6, 2001. All previously outstanding equity securities, including common stock and preferred stock, and all options and other rights to acquire Arch securities were cancelled.

On July 8, Arch Wireless said that Arch Wireless Holdings had given notice of its intention to redeem $10 million principal amount of its 10% notes. Arch said that it expected to redeem the notes on July 31. It said the redemption transaction would be handled by the notes' trustee, The Bank of New York. Arch said that under terms of the notes' indenture, only holders of record as of July 16 would be entitled to receive cash distributions in connection with the redemption. Arch warned that creditors that had not yet tendered their letters of transmittal to The Bank New York in accordance with Arch's Joint Plan of Reorganization would not receive a cash distribution in connection with the redemption, unless their letter of transmittal were to be received by the exchange agent by July 15. Accordingly, Arch said it "strongly" urged all such creditors to submit their transmittal letters prior to July 15. Arch said that early redemption of that portion of the 10% notes - this in addition to recent exchange transactions undertaken as part of its overall financial reorganization - would further lower the company's interest expense and generate greater financial flexibility.

On July 31, Arch Wireless said that its subsidiary had completed the previously announced redemption, at par value, of $10 million of 10% notes, plus accrued interest. It said that with the redemption, Arch now had $190 million principal amount of the 10% notes outstanding, and said that it had given The Bank of New York notice of its intention to redeem another $15 million of the notes on Aug. 30. Only holders of record as of Aug. 15 could participate in the transaction. Arch said that creditors that had not yet tendered their letters of transmittal to The Bank New York would not be eligible to receive a cash distribution in connection with the Aug. 30 redemption unless such letters of transmittal had been received by the exchange agent by Aug. 14.

On Aug. 30, Arch Wireless said that its subsidiary had completed the previously announced redemption, at par value, of $15 million of its 10% notes, plus accrued interest. It said that with the redemption, the second in recent weeks, Arch now had $175 million principal amount of the 10% notes outstanding, and said that it had given The Bank of New York notice of its intention to redeem another $15 million of the notes on Sept. 30. Only holders of record as of Sept. 16 could participate in the transaction.

On Sept. 30, Arch said that its subsidiary had completed the previously announced redemption, at par value, of $15 million of its 10% notes, plus accrued interest. It said that with the redemption, the third in recent weeks, Arch now had $160 million principal amount of the 10% notes outstanding, having redeemed a total of $40 million of the $200 million of the notes that were originally issued. Arch did not at that time announce plans for a further redemption of the notes.

Kerzner calls 8 5/8% '07 notes for redemption

Kerzner International Ltd. and its wholly owned subsidiary, Kerzner International North America, Inc. said on Wednesday (Nov. 27) that they had called for redemption the entire $74.2 million of remaining outstanding 8 5/8% senior subordinated notes due 2007.

Kerzner, a Paradise Island, Bahamas-based international gaming and resort company, will redeem the notes on Dec. 27, 2002, at the redemption price of 104.313% of par, or $1,043.13 per $1,000 principal amount outstanding, plus accrued interest. Payment will be made to each Note holder upon presentation and surrender of the Notes in accordance with the terms of the indenture. The company plans to fund the redemption with available cash and borrowings under its revolving credit facility.

R. H. Donnelley sells bonds; proceeds to buy back 9 1/8% '08 notes

R.H. Donnelley Inc. (B1/B+) was heard by high yield syndicate sources to have sold $925 million of new bonds in a two-part deal on Tuesday (Nov. 26), with a portion of the proceeds from the deal expected to be used to finance the company's previously announced planned tender offer for its outstanding 9 1/8% senior subordinated notes due 2008.

AS PREVIOUSLY ANNOUNCED, the Purchase, N.Y. -based directory publishing company, a subsidiary of R.H. Donnelley Corp., said last Monday (Nov. 25) that was is planning to make a tender offer for all $150 million of its outstanding 9 1/8% notes and will also begin a related solicitation of noteholder consents to proposed changes in the notes' indenture.

The company said that it anticipates that the tender offer purchase price (including any related consent payment) will be par plus accrued interest up to the date of repurchase, and that completion of the tender offer will be conditioned upon - among other things - the consummation of the pending acquisition by Donnelley of Sprint Corp.'s publishing and advertising business and related financings.

The exact terms and conditions of the tender offer and exit consent solicitation will be specified in, and are qualified in their entirety by, the tender offer and consent solicitation statement and related materials that will be distributed to holders of 2008 notes.

Donnelley further said that the tender offer would be financed with a portion of the expected proceeds of the parent company's $925 million two-part Rule 144A offering of senior notes and senior subordinated notes. Donnelley would also use portions of the bond sale proceeds to partially finance the acquisition of the Sprint directory publishing business, and to repay existing senior debt.

Levi Strauss sells new bonds; proceeds to refinance 6.80% '03 notes

Levi Strauss & Co. (B3/BB) was heard by high yield syndicate sources to have sold $425 million of new bonds on Tuesday (Nov. 26), with a portion of the proceeds from the deal expected to be used to refinance the company's outstanding 6.80% senior notes due 2003.

AS PREVIOUSLY ANNOUNCED, Levi Strauss, a San Francisco-based apparel manufacturer, said last Monday (Nov. 25) that it would sell $300 million of senior notes due 2012.

It said that of the proceeds, $115 million will be used to repay bank debt; the rest, subject to obtaining bank waivers, will be used to refinance the company's $350 million of 6.80% notes, either at maturity, by repurchase or otherwise, or to repay other debt, or for general corporate purposes.

Shoney's completes tender for '04 LYON notes

Shoney's, Inc. said on Nov. 18 that it had completed its previously announced tender offer for all of its outstanding zero-coupon subordinated Liquid Yield Option Notes (LYONs) due 2004, which expired as scheduled on Nov. 15 without extension. Shoney's received tenders of notes representing approximately 75% of the $15.5 million aggregate principal amount outstanding of the LYONs.

D.F. King & Co., Inc. (call 800 290-6431) was the information agent for the tender offer.

AS PREVIOUSLY ANNOUNCED, Shoney's, a Nashville, Tenn.-based restaurant chain operator, said on Oct. 21 that it had begun a tender offer for all of its outstanding zero-coupon subordinated LYON notes.

The company said that holders tendering notes on or before 5 p.m. ET on Nov. 15 would receive $840 per $1,000 principal amount of the notes.

Alliance Laundry terminates 9 5/8% '08 notes tender offer

Alliance Laundry Systems LLC and Alliance Laundry Corp. said on Nov. 14 that they were terminating their previously announced tender offer for all of their outstanding 9 5/8% senior notes due 2008, as well as the related solicitation of noteholder consents to proposed indenture amendment and a waiver of certain indenture provisions.

Concurrently, Alliance Laundry and Alliance Laundry Systems Income Fund said that previously announced plans for an initial public offering of trust units of the Fund on the Toronto Stock Exchange had been withdrawn, based on current income trust market conditions and the desire of Alliance Laundry Systems to maximize subscription proceeds from the sale. The tender offer for the 9 5/8% notes had been conditioned upon completion of the IPO, among other requirements.

Lehman Brothers Inc. (call 212 528-7581 or toll-free at 800 438-3242 ) was the dealer manager and solicitation agent for the tender offer and consent solicitation. D. F. King & Co., Inc. (call 212 269-5550 or toll free at 800 431-9642) was the information agent. The Bank of New York was the depositary for the offer.

AS PREVIOUSLY ANNOUNCED, Alliance Laundry, a Ripon, Wis.-based designer, manufacturer and marketer of commercial laundry equipment in North America and worldwide, said on Nov. 4 that it had begun a cash offer to purchase all $110 million of the outstanding 9 5/8% notes, as well as a related consent solicitation.

The company said that the consent solicitation would expire at 5 p.m. ET on Nov. 15 and the tender offer would expire at 5 p.m. ET on Dec. 4, with both deadlines subject to possible extension. Notes tendered and consents delivered before the consent date could not be withdrawn or revoked, respectively, after the consent date.

It said that total consideration to be paid for each validly tendered note (comprised of a purchase price of $990 per $1,000 principal amount of the notes tendered and a $30 per principal amount consent payment) would total $1,020 per $1,000 principal amount, plus accrued and unpaid interest on the notes up to, but not including, the date of payment. It said that only those holders tendering their notes prior to the consent date would be eligible to receive the total consideration, while those holders tending after the consent date would receive just the $990 per $1,000 principal amount purchase price, plus accrued and unpaid interest.

The consent solicitation involves consents to a proposed waiver and proposed amendments to the notes' Indenture. The proposed waiver would waive certain requirements of Alliance Laundry upon a change- of-control, as outlined in the Indenture, and the proposed amendments would eliminate substantially all of the Indenture's restrictive covenants and would amend its event- of- default provisions. Adoption of most of the proposed amendments requires the consent of the holders of at least a majority of the principal amount of the outstanding notes. Adoption of the proposed waiver and certain of the proposed amendments requires the consent of the holders of at least 75% of the principal amount of the outstanding notes. Holders who tender their notes will be required to consent to the proposed waiver and the proposed amendments and holders may not deliver consents to the proposed waiver and the proposed amendments without tendering their notes in the offer to purchase.

Alliance Laundry said the tender offer would be conditioned upon, among other things, the receipt by the company of sufficient consents to amend the Indenture governing the notes, and completion of the initial public offering by Alliance Laundry Systems Income Fund.

On Oct. 1, the Fund and Alliance Laundry announced the filing of a preliminary prospectus with securities regulators across Canada for the initial public offering of trust units of the Fund. The Fund was created to acquire an indirect ownership interest in the company and will make monthly distributions of its available cash to the holder of its units. The closing of the IPO - tentatively expected on or about Dec. 2 - is subject to the receipt of required regulatory approvals and other customary conditions. Alliance Laundry expects to use the proceeds from the sale of such ownership interest to reduce existing debt and retire other securities, with a portion of the proceeds to consummate the offer to purchase its outstanding 9 5/8% notes. The proceeds would also ultimately provide the company with the flexibility to fund future acquisitions and product development.

Pac-West Telecomm tenders for 13½% '09 notes

Pac-West Telecomm Inc. said on Nov. 12 that it was making a tender offer to the holders of its $106.489 million of remaining outstanding 13½% Series B senior notes due 2009, and was also soliciting noteholder consents to proposed indenture changes (the company announced on Nov. 18 that it had posted the offering memorandum and other related documents on its Internet website, www.pacwest.com).

Pac-West said it would purchase the notes at a price to be determined via a "modified Dutch auction" process. It said that a noteholder could make what the company termed a "competitive offer" to sell the notes at a minimum price within the range of $34 to $42 per $100 principal amount, not including accrued interest, or could alternatively make what Pac-West termed a "noncompetitive offer" to sell the notes without specifying an offer price.

Pac-West said that if it elects to purchase any notes, it will determine a single purchase price, not including accrued interest, and will accept all competitive offers of notes specifying a offer price equal to or less than the company's purchase price, as well as all non-competitive offers made without a specified purchase price. All noteholders whose offers are accepted by Pac-West will receive the same purchase price, even if the purchase price is higher than the offer price submitted by a noteholder. Once an offer has been made by a noteholder, it is considered irrevocable, except that a competitive offer MAY be withdrawn if it is resubmitted at a lower price, or as a non-competitive offer. Non-competitive offers may also be withdrawn under certain limited circumstances.

Noteholders who offer their notes to the company will be deemed to have consented to the proposed indenture amendments, which would eliminate substantially all of the restrictive covenants and related events of default. Pac-West said the consents are conditional upon the company's acceptance of at least a majority of the outstanding principal amount of the notes. The purchase price will include a consent payment of 25 cents per $100 principal amount of the notes.

Upon satisfaction of the minimum consent condition, Pac-West will deliver to the notes' trustee evidence of receipt of the requisite consents needed for approval of the indenture changes, with that delivery date to be deemed the consent date. Upon execution of a supplemental indenture incorporating the proposed indenture changes, those changes will take effect. Any remaining outstanding notes not tendered under the offer or accepted by the company for purchase will be considered to be bound by the indenture changes.

The tender offer is scheduled expire at 5 p.m. ET on Dec. 11, subject to possible extension. Pac-West anticipates paying the purchase price for the notes it has accepted under the offer on the settlement date (tentatively expected to be Dec. 12, but in any event, no more than five days after the expiration date). The company will also at that time pay in addition to the purchase price all accrued interest on the notes through the day before the settlement date.

Pac-West expects to finance the tender offer from available funds.

Wells Fargo Bank Minnesota NA in Minneapolis (call 800 344-5428) is the information agent and the depositary for the offer.

AS PREVIOUSLY ANNOUNCED, Pac-West Telecom, a Stockton, Calif-based provider of integrated communications services to service providers and business customers in the western U.S., said on Nov. 11 that it expected to announce a cash tender offer for its outstanding 13½% notes on Nov. 12.

Pac-West also said that In connection with the invitation to the noteholders to offer their notes back to the company, it would conduct a consent solicitation to amend the indenture relating to those notes. It said the proposed amendments would - among other things - substantially remove all of the restrictive covenants as well as certain events of default related to such covenants. The company said it would continue to review its debt obligations, including any senior notes not purchased under the tender offer, and consider various alternatives to continue to reduce such obligations.

Pac-West said that the tender offer would be part of the company's continuing effort o reduce the amount of debt in its capital structure. It said that retirement of the 13½% notes would reduce its annual interest expense and accelerate our attainment of free cash flow."

Pac-West Telecom, which also reported third-quarter earnings data on Nov. 11, further said that it had realized a gain on repurchase of bonds of $14.9 million in the quarter, relating to open market purchases undertaken to retire $22.8 million principal amount of the 13½% notes at a significant discount from face value. It said that those debt retirement transactions would result in annual interest payment reductions of approximately $3.1 million per year.

© 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.