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Fleetwood plans exchange offer for 5% convertibles ahead of December put option
By Angela McDaniels
Tacoma, Wash., Oct. 21 - Fleetwood Enterprises, Inc. said it plans to make an exchange offer for its $100 million 5% convertible senior subordinated debentures due 2023.
Holders will be offered common stock and new senior secured notes that will be guaranteed by some of its subsidiaries and will be secured, in part, by some of its real property, according to a company news release.
In contrast, the convertibles are subordinated to Fleetwood's senior debt, are not guaranteed by any of Fleetwood's subsidiaries and are not secured by any of Fleetwood's assets, the company noted.
The company also anticipates that interest on the new notes will be payable part in cash and part in kind and that the new notes will not be convertible.
A successful exchange offer would help the company avoid the convertibles' Dec. 15 put option. In return, the company said the new notes will provide an increase in yield, be subordinated only to its secured bank lenders, benefit from subsidiary guarantees and be secured by real property.
Fleetwood continues to hold discussions with some convertibles holders and with its lending syndicate regarding the relative rights of its senior lenders and the holders of the securities it plans to issue in the exchange offer.
However, the company expects the exchange offer to begin on or around Oct. 27 and run for about 23 business days.
The consummation of the offer will be subject to a minimum tender condition.
In late August, Fleetwood said it believed it highly likely that holders will put back the convertibles at par and that it was working with investors to replace the convertibles.
MacKenzie Partners (800 322-2885) will be the information agent for the exchange offer.
Fleetwood is based in Riverside, Calif., and produces recreational vehicles and manufactured homes through its subsidiaries.
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