Gregg Appliances launches tender offer for 9% notes

By Jennifer Chiou

New York, June 26 - Gregg Appliances, Inc. said it began a cash tender offer and consent solicitation for any and all of its $111.205 million of 9% senior notes due 2013.

The company is soliciting consents to amend the note indenture to eliminate most of the indenture's restrictive covenants and certain events of default and related provisions and would significantly amend certain other provisions.

The offer ends at midnight ET on July 24.

For each $1,000 principal amount of notes, the company said it will determine its payout using a fixed spread of 50 basis points plus the bid-side yield to maturity of the 4 7/8% Treasury due Jan. 31, 2009.

The payout will include a consent payment of $30.00 for those who tender by the consent deadline of 5 p.m. ET on July 10.

Holders who tender will also receive accrued interest to the payment date.

Those who tender must deliver consents.

The offer is conditioned upon, among other things, the receipt of tenders from the holders of at least a majority of notes; the consummation of the initial public offering of hhgregg, Inc., resulting in gross proceeds to hhgregg of at least $50 million; the completion of a corporate reorganization whereby Gregg Appliances will become a wholly owned subsidiary of hhgregg; and the closing of the debt refinancing of Gregg Appliances, under which Gregg Appliances will amend or amend and restate its existing $75 million revolving credit facility, to among other things, increase the amount of the facility to $100 million, and enter into a new $100 million term loan B.

Wachovia Securities is the dealer manager and solicitation agent (866 309-6316 or call collect 704 715-8341). Global Bondholder Services Corp., is the information agent (866 470-4500 or call collect 212 430-3774).

The company announced plans for the offer on April 18.

Indianapolis-based Gregg sells consumer electronics, home appliances, mattresses and related services, operating under the hhgregg and Fine Lines brands.

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