CONSECO, INC. (CNC) (B2/B) said Thursday (Jan. 31) that its CONSECO FINANCE CORP. subsidiary has begun a tender offer for all of its $110.5 million of outstanding 10.25% senior subordinated notes, which are scheduled to come due on June 1. The outstanding principal amount does not include $23.7 million of the notes held by Conseco. The tender offer is scheduled to expire at 5 p.m. ET March 1; the notes being tendered for will be purchased at par plus accrued and unpaid interest up to, but not including, the payment date. Conseco Finance intends to finance the tender offer with working capital, cash flow from operations and available credit facilities. AS PREVIOUSLY ANNOUNCED, Conseco, a Carmel, Ind.-based insurer, began buying back portions of the $864 million of public debt maturing in 2002 ($450 for Conseco Inc. and $414 million for Conseco Finance as of June 30, 2001) in several transactions last year. It said on Oct. 30 that it had bought back $49 million of its public debt in the quarter ended Sept. 30, and another $75 million of debt during October ($124 million total). Conseco at the time did not elaborate as to whether those figures represented face amounts of repurchased debt, as turned out to be the case, or total figures it spent to buy back more than face amount at a discount, nor did it specify which of its public debt issues it had repurchased. Conseco further reported on Dec. 6 that during the month of November, it had repurchased an additional $108 million of public debt scheduled to mature in 2002. The company said that $83 million of the newly repurchased debt had been issued by parent Conseco, while $25 million had been issued by Conseco Finance. Those repurchases, combined with the previously announced purchases of 2002 maturity debt, brought the total amount bought back in the third quarter ended Sept. 30 and the following two months to $232 million ($148 million from Conseco Inc. and $84 million from Conseco Finance), representing 27% of the two companies' debt which is to mature in 2002 and leaving outstanding at that time $632 million ($302 million from Conseco Inc. and $330 million from Conseco Finance). On Jan. 16, Conseco said that it had repurchased an additional $34 million of public debt maturing in 2002 since its last previous debt repurchase report to investors on Dec. 6, bringing the total amount of 2002 maturities retired early since June 30, 2001 to $266 million, consisting of $148 million for Conseco, Inc. and $118 million for Conseco Finance. All of the most recently retired debt had been issued by Conseco Finance. The total amount retired represents 30% of all Conseco and Conseco Finance public debt due in 2002. The company confirmed that these transactions have all occurred at a discount to face value, but it did not disclose the average discount. Following the latest transactions, a total of $598 million of Conseco Inc. and Conseco Finance public debt scheduled to mature in 2002 remains outstanding, consisting of $302 million of Conseco, Inc. public debt in a single issue that matures in October, and $296 million of Conseco Finance public debt, approximately $125 million of which matures in June, with the balance (about $171 million) maturing in September. The dealer manager for the tender offer announced Jan. 31 is Lehman Brothers (call 212 455-3327 or collect at 212 681-2265 through Feb. 8; after Feb. 8, call 212 528-7581 or toll-free at 800 438-3242).Georgeson Shareholder Communications, Inc. (800 223-2064) is the information agent.

SIX FLAGS, INC. (PKS) said Thursday that it would sell approximately $480 million of senior notes in a Rule 144A placement, and would use the net proceeds of the offering to repay principal and premium on all $280 million aggregate principal amount of its 9¼% senior notes due 2006 and all $170 million aggregate principal amount of the 8 7/8% senior notes due 2006 issued by its primary operating subsidiary, SIX FLAGS OPERATIONS INC. Six Flags, a New York-based operator of amusement parks and theme parks, said it intends to call the existing notes for redemption immediately following the closing of the offering of its new senior notes, and to redeem the existing notes on April 1, 2002, the first date on which the existing notes are permitted to be redeemed in accordance with their terms. Later in the session Jan. 31, high yield market sources heard that Six Flags had sold the $480 million of new notes.

TEMPLE-INLAND Inc. (TIN) (Baa2/BBB) said Thursday (Jan. 31) that as of 5 p.m. ET on Jan. 30, it had received tenders and the accompanying consents to proposed indenture changes from the holders of at least a majority of the 9 3/8% and 9¾% senior notes due 2007 and the 9 7/8% senior subordinated notes due 2008 of GAYLORD CONTAINER CORP. (GCR) (senior at Caa2/CCC+; subordinated at Caa3/CCC), under its previously announced tender offer and related consent solicitation. With the consent condition of the offer having now been met, and the notes' withdrawal deadline having passed, any notes which have been tendered or which may be tendered may not be withdrawn. However, the previously announced minimum note tender condition of the tender offer has not yet been achieved, and the tender offer continues. Gaylord intends to immediately execute supplemental indentures for the notes implementing the planned amendments, although these will not become operative until all of the validly tendered notes are purchased in the tender offer. The supplemental indentures also provide for a specific waiver of any change-of-control provisions in the indentures; the waivers for each respective note series will become operative immediately upon execution of the supplemental indentures. AS PREVIOUSLY ANNOUNCED, Temple-Inland, an Austin, Tex.-based maker of packaging materials, said on Jan. 21 that it had launched a new tender offer for the outstanding Gaylord 9 3/8%, 9¾%, and 9 7/8% notes, and also launched a new tender offer for Gaylord's common shares, as part of renewed effort to acquire Gaylord, a Deerfield, Ill.-based packaging materials maker, which has agreed to the revised bid terms (Temple-Inland had announced Sept. 28 that it would acquire all of Gaylord's outstanding junk bond debt and its shares in order to acquire the company in a $786 million deal, but it was forced to admit on Jan 8 that the planned acquisition would not take place due to a lack of participation by the noteholders and the resulting failure to meet the minimum tender condition). In its Jan. 21 announcement of the new tender offer, Temple-Inland said the stock and debt tenders would be cross-conditional, and would expire on Feb. 19, subject to possible extension. Assuming that all shares and notes are tendered, the total consideration for the transaction is approximately $847 million, consisting of about $65 million to acquire the Gaylord shares at $1.17 per share, and around $782 million to acquire all of the notes, and to satisfy Gaylord's outstanding bank debt and other senior secured debt obligations. Temple-Inland said one of its subsidiaries is tendering for the public debt and soliciting noteholder consents to proposed indenture changes that would eliminate certain restrictive covenants and other contractual obligations of Gaylord. It set a purchase price of $900 per $1,000 principal amount for Gaylord's 9 3/8% and 9¾% senior notes and $400 per $1,000 principal amount for Gaylord's 9 7/8% notes, an increase from the prices it offered in its earlier tender offer, which was allowed to expire on Jan. 7 due to lack of sufficient noteholder participation. Except for the increased noteholder consideration, the material terms of the new offer are essentially unchanged from those of the previous offer. The merger deal is contingent upon, among other things, Temple-Inland getting at least 90% of each series of the outstanding bonds and two-thirds of the outstanding Gaylord shares, as well as regulatory approval and the satisfaction or waiver of customary closing conditions. In announcing the revised tender offers and the new merger agreement on Jan. 21, Temple-Inland also noted that the transaction - just like the previous merger arrangement had been - is not conditioned upon financing, since Temple-Inland has received a financing commitment from Citibank, NA, to fund its offer for all outstanding Gaylord shares and the notes, as well as to satisfy the bank debt and other senior secured debt obligations, and pay costs and expenses associated with the transaction. Deutsche Banc Alex. Brown and Rothschild Inc., acted as financial advisors to Gaylord. Reprising roles they filled during the original debt tender offer, Salomon Smith Barney Inc. (800 558-3745) is dealer/manager for Temple-Inland in connection with the tender offer for the notes. The information agent is D. F. King & Co., Inc. (bankers and brokers call 212 269-5550; all others call 800 549-6650).

© 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.