Friendly Ice Cream prices tender for 8 3/8% notes

By Angela McDaniels

Seattle, Aug. 8 - Friendly Ice Cream Corp. said it will pay $1,032.45 for each $1,000 principal amount of its $175 million 8 3/8% senior notes due 2012 tendered in the cash tender offer begun on July 26.

The company determined the payout using a fixed spread of 50 basis points over the yield on the 4 7/8% Treasury note due May 31, 2008. The yield was 4.966%, and the tender offer yield was 5.4666%.

The payout includes a $30.00 consent payment for notes tendered by 5 p.m. ET on Aug. 8, the consent deadline.

Friendly Ice Cream will also pay accrued interest to the settlement date.

The tender offer expires at midnight ET on Aug. 22.

The Wilbraham, Mass.-based restaurant company is also soliciting consents that would, among other things, eliminate substantially all of the restrictive covenants and some events of default in the note indenture.

The company needs consents from holders of a majority of the notes.

As previously announced, Friendly Ice Cream entered into a merger agreement on June 17 under which Freeze Operations, Inc. will merge into Friendly Ice Cream. Freeze Operations is a wholly owned subsidiary of Freeze Operations Holding Corp., which is an affiliate of private investment firm Sun Capital Partners Inc.

The tender offer is conditioned on, among other things, the closing of the merger and the execution of a supplemental indenture.

Barclays Capital Inc. (866 307-8991 or call collect 212 412-4072) is the dealer manager and solicitation agent, and Georgeson Inc. (888 605-7583 or 212 440-9800) is the information agent.

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