PHH gets tenders for 82% of 7 1/8% notes, to redeem remainder Sept. 24

By Toni Weeks

San Diego, Sept. 7 - PHH Corp. said it received tenders from holders of $342 million, or 82%, of its outstanding 7 1/8% notes due March 1, 2013 by midnight ET on Sept. 6, the expiration date for the tender offer that began on Aug. 9.

The company previously said it had received tenders and consents from holders of $340 million principal amount, or about 81%, of the notes by 5 p.m. ET on Aug. 22, the consent expiration date.

PHH needed consents from holders of 66 2/3% of the outstanding amount to amend the notes and, after having received them, executed a supplemental indenture on Aug. 23 that eliminated or modified some restrictive covenants.

The company also called for redemption all $76 million principal amount of notes that remained outstanding after the completion of the tender offer. As previously reported, the redemption price will be the greater of the sum of the present values of the remaining scheduled payments discounted at the Treasury rate plus 50 basis points and par. PPH will also pay accrued interest to the redemption date, Sept. 24.

Holders who tendered their notes by the consent date received the total purchase price of $1,033.55 per $1,000 principal amount of notes, which included a consent premium of $30.00 per $1,000 principal amount. Those who tendered their notes after the consent deadline only received the base payment. Settlement occurred Sept. 7.

PHH priced the tender offer at 11 a.m. ET on Aug. 21 using the bid-side yield on the 0.625% Treasury note due Feb. 28, 2013 plus a fixed spread of 50 bps. The reference yield was 0.178%.

Completion of the tender offer, including payment for the tendered notes, was conditioned on completion of a new debt offering with enough proceeds to help fund the offer. The company closed a $275 million offering of 7 3/8% senior notes due 2019 on Aug. 23. It also closed on a $300 million amended and restated revolving credit facility on Aug. 8.

Bank of America Merrill Lynch (888 292-0070 or collect 980 387-3907), Barclays (800 438-3242 or collect 212 528-7581) and Citigroup Global Markets Inc. (800 558-3745 or collect 212 723-6106) were the dealer managers. D.F. King & Co., Inc. (800 290-6426 or banks and brokers 212 269-5550) was the tender agent and information agent.

PHH is a Mt. Laurel, N.J.-based business process management services company for the mortgage and fleet management industries.

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