Grupo Gigante gets consents needed to amend 8¾% notes

By Angela McDaniels

Tacoma, Wash., Dec. 12 - Grupo Gigante, SAB de CV has received consents and tenders from holders of $232.5 million, or 89%, of its $260 million 8¾% senior notes due 2016, according to a company news release.

The consents will allow the company to amend the note indenture to eliminate or modify substantially all the covenants and some events of default and to modify the provisions relating to defeasance of the notes.

Gigante said it expect to enter promptly into a supplemental indenture, and the amendments will become operative once the tendered notes are accepted for payment.

The tender offer and consent solicitation began on Nov. 28. The consent deadline was 5 p.m. ET on Dec. 11, and the tender offer will expire at 8 a.m. ET on Dec. 27.

Holders who tender their notes must grant consents and vice versa.

The payout for each $1,000 principal amount of notes will equal the sum of 35% of the equity clawback price - which is $1,087.50 - plus 65% of the fixed spread price, as defined below.

The payout will include a $20.00 consent fee for each note tendered by the consent deadline, and all noteholders will also receive accrued interest up to but excluding the settlement date.

The fixed spread price for each $1,000 principal amount of the notes will equal the present value on the settlement date of $1,043.75 - which is the redemption price payable for the notes on April 13, 2011 - and the present value of interest to April 13, 2011, discounted using a yield to April 13, 2011 equal to the sum of the reference yield on the 4 7/8% Treasury notes due April 30, 2011, plus 75 basis points, minus accrued interest up to but excluding the settlement date.

The tender offer remains subject to the consummation of a proposed transaction between Gigante and Tiendas Soriana SA de CV, according to the release.

Citi (800 558-3745 or 212 723-6108) is the dealer manager, and Global Bondholder Services Corp. (866 794-2200) is the information agent.

Gigante is a food retailer based in Mexico City.

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