Arch Wireless completes latest 10% '07 notes redemptions

Arch Wireless, Inc. said on Monday (March 31) that its wholly owned Arch Wireless Holdings, Inc., subsidiary had completed the previously announced scheduled redemption of $16.7 million of its 10% senior subordinated secured notes due 2007.

The notes were redeemed as scheduled on Monday at par value, plus accrued interest. . Under terms of the notes' indenture, holders of record (as of March 13) received cash distributions in connection with the March 31 redemption.

The redemption was the latest in a series of such transactions, and brought the amount of the outstanding notes down to $83.3 million from $100 million previously. The company did not announce a further note redemption at this time.

AS PREVIOUSLY ANNOUNCED, Arch Wireless - a Westborough, Mass.-based provider of wireless messaging and mobile information services - said on May 29 that its First Amended Joint Plan of Reorganization, which had been confirmed by the U.S. Bankruptcy Court for the Western Division of Massachusetts on May 15, officially became effective, thus marking the formal emergence from Chapter 11 of Arch and its subsidiaries. As part of that reorganization, Arch Wireless Holdings issued $200 million principal amount of new 10% notes and $100 million principal amount of new 12% subordinated secured compounding notes due 2009, while the parent company issued 20 million shares of new common stock. The new shares and notes were issued in full satisfaction, release, discharge and cancellation of all claims against Arch and its subsidiaries based on transactions or occurrences prior to Dec. 6, 2001. All previously outstanding equity securities, including common stock and preferred stock, and all options and other rights to acquire Arch securities were cancelled.

On July 8, Arch Wireless said that Arch Wireless Holdings had given notice of its intention to redeem $10 million principal amount of its 10% notes. Arch said that it expected to redeem the notes on July 31. It said the redemption transaction would be handled by the notes' trustee, The Bank of New York. Arch said that under terms of the notes' indenture, only holders of record as of July 16 would be entitled to receive cash distributions in connection with the redemption. Arch warned that creditors that had not yet tendered their letters of transmittal to The Bank New York in accordance with Arch's Joint Plan of Reorganization would not receive a cash distribution in connection with the redemption, unless their letter of transmittal were to be received by the exchange agent by July 15. Accordingly, Arch said it "strongly" urged all such creditors to submit their transmittal letters prior to July 15. Arch said that early redemption of that portion of the 10% notes - this in addition to recent exchange transactions undertaken as part of its overall financial reorganization - would further lower the company's interest expense and generate greater financial flexibility.

On July 31, Arch Wireless said that its subsidiary had completed the previously announced redemption, at par value, of $10 million of 10% notes, plus accrued interest. It said that with the redemption, Arch now had $190 million principal amount of the 10% notes outstanding, and said that it had given The Bank of New York notice of its intention to redeem another $15 million of the notes on Aug. 30. Only holders of record as of Aug. 15 could participate in the transaction. Arch said that creditors that had not yet tendered their letters of transmittal to The Bank New York would not be eligible to receive a cash distribution in connection with the Aug. 30 redemption unless such letters of transmittal had been received by the exchange agent by Aug. 14.

On Aug. 30, Arch Wireless said that its subsidiary had completed the previously announced redemption, at par value, of $15 million of its 10% notes, plus accrued interest. It said that with the redemption, the second in recent weeks, Arch now had $175 million principal amount of the 10% notes outstanding, and said that it had given The Bank of New York notice of its intention to redeem another $15 million of the notes on Sept. 30. Only holders of record as of Sept. 16 could participate in the transaction.

On Sept. 30, Arch said that its subsidiary had completed the previously announced redemption, at par value, of $15 million of its 10% notes, plus accrued interest. It said that with the redemption, the third in recent weeks, Arch now had $160 million principal amount of the 10% notes outstanding, having redeemed a total of $40 million of the $200 million of the notes that were originally issued. Arch did not at that time announce plans for a further redemption of the notes.

On Nov. 2, Arch said that its subsidiary had notified The Bank of New York, as trustee, of its intention to redeem, at par value, another $35 million principal amount of the 10% notes on Dec. 31, with a record date for the transaction of Dec. 16.

Arch also disclosed that the company had completed a mandatory redemption payment of $15 million, plus accrued interest, on Nov. 15, bringing the amount of the remaining outstanding notes down to $145 million from $160 million previously. It said that upon the completion of the planned $35 million redemption on Dec. 31, Arch will have redeemed $90 million of the $200 million of the bonds which were originally issued on May 29, after Arch's financial restructuring was completed. The $90 million would include the $35 million being redeemed on Dec. 31, the $15 million November redemption and the $40 million total redeemed in three separate previously announced transactions which took place in July, August and September. Following the Dec. 31 redemption, Arch said it would have $110 million of the notes remaining outstanding.

On Dec. 31, Arch said that its subsidiary had completed the previously announced redemption of $35 million of the 10% notes, bringing the amount of notes redeemed since the bonds were issued up to $90 million, and bringing the amount still outstanding down to $110 million.

On Jan. 28, Arch said that its subsidiary would redeem an additional $10 million principal amount of the 10% notes at par value on Feb. 28, a transaction that would bring the amount of outstanding notes down to $100 million from $110 million. Arch announced completion of that transaction on Feb. 28, and also said that its subsidiary was planning to redeem another $15 million principal amount of the 10% notes at par on March 31, which would further reduce the outstanding amount to $85 million when completed.

On March 12, Arch said that its Arch Wireless Holdings subsidiary and The Bank of New York, as trustee, had entered into supplemental indentures for Arch Wireless Holdings' 10% notes and its 12% subordinated secured compounding notes due 2009.

The company said that the supplemental indentures became effective immediately upon execution; they amended certain covenants that require minimum levels of EBITDA, direct units in service, and service, rental and maintenance revenue for certain quarters through March 31, 2004. Additionally, the supplemental indenture for the 10% notes allows net cash proceeds from an asset sale to be used to repay the 10% notes on an optional redemption date, if that redemption date is earlier than the next interest payment date.

As a result, Arch also announced that its subsidiary would redeem an extra $1.7 million principal amount of the 10% notes on March 31, in addition to the previously announced scheduled redemption that day of $15 million of the 10% notes. Accordingly, Arch tabulated that the total principal amount of 10% notes to be redeemed on March 31, would ill be $16.7 million. The additional redemption amount of $1.7 million represents net cash proceeds received by Arch Wireless Holdings from the sale of certain real estate in January, and was delivered to The Bank of New York, as trustee, upon consummation of the sale, as required by the notes' indenture.

Sweetheart Cup extends exchange offer for 12% '03 notes

Sweetheart Cup Company Inc. (Caa2) said on Monday (March 31) that it had extended its previously announced offer to exchange new debt for its outstanding 12% notes scheduled to come due on Sept. 1.

The offer, which had been scheduled to expire at 5 p.m. ET on Friday (March 28), was extended to 5 p.m. ET on Monday (March 31), subject to possible further extension.

Sweetheart said it was advised by Wells Fargo Bank Minnesota, NA, the exchange agent for the exchange offer and consent solicitation, that, as of 5 p.m. ET on March 28, a total of approximately $76.2 million in aggregate principal amount of Sweetheart Notes were tendered in the exchange offer and consent solicitation, up from the $70.6 million which had been tendered by the prior deadline expiration, on March 27.

The company said that all previously announced conditions to consummation of the exchange offer and the related consent solicitation continue to apply. Holders who had previously tendered their Sweetheart Notes need not take any further action as a result of this extension. Holders who had not previously tendered their notes may tender their notes, while holders who wish to withdraw their previously-tendered notes may do so, by following the directions contained in the prospectus and the consent and letter of transmittal filed with the Securities and Exchange Commission by Sweetheart and Sweetheart Holdings Inc. and previously sent to holders.

It further said that the indenture governing the new notes will be executed by Sweetheart and by Wells Fargo Bank Minnesota, NA, as trustee, and the exchange of the new notes for the existing notes and payment of consent payments will take place as soon as practicable after the expiration of the exchange and consent solicitation, if all of the conditions to the consummation of the exchange offer and consent solicitation have been satisfied or waived by Sweetheart.

Bear Sterns & Co. Inc. (call the Global Liability Management Group toll-free at 877 696-2327 is the dealer-manager for the exchange offer and consent solicitation. D.F. King & Co., Inc. is the information agent (call toll-free at 800 488-8075; banks and brokers call collect at 212 269-5550).

AS PREVIOUSLY ANNOUNCED: Sweetheart Cup, an Owens Mills, Md.-based maker of paper cups and other packaging products for the food-service industry, said on Feb. 14 that it was planning to offer to exchange new 12% senior notes due 2004 for its outstanding 12% 2003 notes. It said that it would also solicit consent of the 2003 noteholders to proposed changes in the notes' indenture that would eliminate most of the restrictive covenants.

Sweetheart said in an S-4 registration statement filed with the Securities and Exchange Commission that it would issue up to $110 million of the new 2004 notes in exchange for all of the outstanding 2003 notes. The new notes would be guaranteed by the company's corporate parent, Sweetheart Holdings Inc, and would be exchanged for the existing notes on a 1-for-1 basis.

It said that holders tendering notes under the exchange offer would also have to consent to the proposed indenture changes. Those holders validly tendering their notes (and thus, consenting to the indenture changes) before a consent deadline and not subsequently withdrawing them would be eligible to receive a consent payment equal to 1% of the principal amount of notes tendered. Holders not tendering their notes by the consent deadline would not be eligible to receive the consent payment.

Sweetheart did not initially set an expiration deadline or a consent deadline for the offer, and said the offer would commence as soon as is practicable after the registration becomes effective.

It said that holders tendering their notes before the consent deadline could withdraw their tendered notes and revoke their consents at any time prior to that deadline, but not afterward. Holders tendering after the consent deadline could withdraw their tendered notes and revoke consents at any time prior to the expiration date. It further said that holders could revoke consents at any time prior to the execution of the supplemental indenture implementing the proposed amendments to the indenture governing the 2003 notes.

The company cautioned noteholders choosing to not tender their notes under the exchange offer that most of the restrictive covenants and the related events of default and certain other provisions in the indenture governing those notes will be removed or substantially modified.

Sweetheart said that completion of the exchange offer would be subject to the satisfaction of several conditions, including - but not limited to - Sweetheart receiving tenders from the holders of at least 90% of the principal amount of the existing notes, and the company obtaining an amendment to its senior credit facility.

On Feb. 27, Sweetheart said that it had begun the previously announced exchange offer for its outstanding 12% 2003 notes, and had begun a related consent solicitation.

The company set the consent deadline at 5 p.m. ET on March 12, while the offer was scheduled expire at 5 p.m. ET on March 27, with both deadlines subject to possible extension.

Sweetheart said that holders could not tender their notes without consenting to the proposed amendments and could not deliver consents without tendering their notes. It said that approval of the proposed indenture amendments would require the consent of holders of at least a majority of the principal amount of the outstanding notes.

The company further said that the exchange offer and the consent solicitation would otherwise take place on terms which the company had previously outlined.

On March 13, Sweetheart said that it had successfully completed the consent solicitation portion of exchange offer.

The company said that as of the now-expired consent deadline of 5 p.m. ET on March 12, it had received the requisite consents necessary to modify the notes' indenture, and had executed a supplemental indenture with the indenture trustee incorporating the desired changes, which eliminate certain restrictive covenants and other provisions in the indenture.

Sweetheart said the modifications implemented by the Supplemental Indenture would not become operative until the completion of the exchange offer and consent solicitation. Any consent payment will be made promptly after the consummation of the exchange offer and consent solicitation.

Achievement of the requisite consents would allow the exchange offer to continue to the scheduled expiration deadline on March 27.

On March 21, Sweetheart said that it had extended its offer to make the consent payment to the holders of the 12% notes to 5 p.m. ET on March 27, subject to possible further extension, so that it would coincide with the previously announced expiration of the exchange offer. The offer was further extended on March 28 to 5 p.m. ET that day.

Sweetheart said it had previously received the requisite consents necessary to modify the indenture governing the existing Sweetheart notes, and had executed a supplemental indenture with the indenture trustee which eliminates certain restrictive covenants and other provisions in the indenture governing the notes. The modifications would not become operative until the consummation of the exchange offer and consent solicitation.

Grohe Holding completes 11½% '10 note consent solicitation

Grohe Holding GmbH (B2/B) said on Monday (March 31) that it had completed its previously announced consent solicitation among the holders of its 11½% senior notes due 2010, which expired as scheduled at 5 p.m. central European time on Thursday (March 27), without extension. The company received the required consents. As a result, once the new senior secured credit facility is funded, Grohe will implement the proposed amendments and waivers and pay holders of record who validly consented to the consent solicitation by the deadline, consent payments of €72.50 per €1,000 principal amount of notes.

Grohe currently expects to transfer such payments to the tabulation agent for distribution by ths coming Friday, April 4.

Credit Suisse First Boston (Europe) Ltd. (contact Guy Douglas at +44 207-888-1780 or Mark Walsh at +44 207-888-7264); Credit Suisse First Boston LLC; Merrill Lynch International (contact Frits Prakke at +44 207-995-1640 or Abdulla Boulsien at +44 207-995-4319); and Merrill Lynch, Pierce, Fenner & Smith Inc. acted as joint solicitation agents for the consent solicitation.

Holders may request a complete copy of the terms and conditions of the consent solicitation and of the proposed amendments and waivers from The Bank of New York, London Branch, or The Bank of New York (Luxembourg) SA, in Luxembourg.

AS PREVIOUSLY ANNOUNCED: Grohe Holding, a German-based manufacturer of faucets, showerheads and other plumbing and sanitary system products, said on March 6 that it planned to seek the consent of holders of at least a majority in principal amount of its 11.5% notes to certain amendments in the notes' indenture and waivers to certain indenture provisions.

Grohe said In a 6-K form filed with the Securities and Exchange Commission that the consent solicitation would expire at 5 p.m. central European time on March 19 (this deadline was subsequently extended). Grohe said it would offer holders consenting by the deadline a consent payment of €60 per €1,000 principal amount of notes.

It said that the proposed indenture changes and waivers, if approved by the notes' holders of record (as of March 6) would permit the company to repay a portion of its shareholder loans; would permit certain Grohe subsidiaries to secure a greater a greater amount of indebtedness than currently exists, in connection with a contemplated refinancing of their senior secured credit facility; and would permit certain company subsidiaries to incur a greater amount of debt senior to the notes than currently exists, in connection with the refinancing.

Additionally, the proposed indenture changes and waivers would clarify that Grohe may form a supervisory board with an equal number of shareholder and employee representatives, which will constitute a Shareholder-elected board as defined in the Indenture, without triggering a change-of- control under the Indenture.

On March 21, Grohe said that it had made what it termed its "final increase" to the consent payment it was offering the noteholders, raising it to €72.5 per €1,000 principal amount of notes tendered (up from the previously announced €60 per €1,000 principal amount).

It also announced what it termed the "final extension" of the consent solicitation, to 5 p.m. central European time on March 27, from the previous March 19 deadline. It said that all consents given previously would remain valid and be subject to the increased consent payment, unless properly revoked. All other previously announced terms of the consent solicitation remained unchanged.

On March 25, Grohe said that it had received a proposal from certain holders of its 11½% notes, seeking further changes in the amended terms of its previously announced consent solicitation among the noteholders.

Grohe said that it received a proposal from a group of bondholders on March 21, outlining alternative terms for the pending consent solicitation. Grohe said that while it "appreciates the desire of the [bondholders' ] group to engage in a constructive dialogue," it was declining to change the terms of the solicitation, saying that the company "believes it has offered holders of record of [the] notes collectively an attractive business proposition."

Grohe further asserted that following the previously announced increase in the consent payment to be paid to holders properly delivering their consents (to €72.5 per €1,000 principal amount), the company "has no further flexibility to increase the price," and reiterated that the price, other terms and the deadline would all remain unchanged.

It said that if the requisite number of consents (i.e. from holders of a majority of the notes) were not received by the March 27 deadline, Grohe would allow the consent solicitation to lapse.

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