Hanger Orthopedic extends expiration for 11¼% notes tender offer

New York, Oct. 1 - Hanger Orthopedic Group, Inc. (B2/B-) said it has extended the expiration deadline on its previously announced tender offer for its 11¼% senior subordinated notes due 2009 to 5 p.m. ET on Oct. 3, subject to possible further extension, from the originally announced deadline of 5 p.m. ET on Oct. 1.

Hanger said that the tender offer and related consent solicitation was extended solely to coincide with the closing of new bank financing, which is expected on Oct. 3.

Hanger did not extend the tender offer's consent deadline, which expired as scheduled at 5 p.m. ET on Sept. 23, without further extension.

It said that as of 5 p.m. ET on Sept. 30, noteholders had tendered $134.438 million aggregate principal amount of the notes and had not withdrawn them, so that other than expiration of the tender offer, all of the previously announced conditions to the tender have been satisfied.

As previously announced, Hanger, a Bethesda, Md.-based provider of orthotic and prosthetic patient-care services, said on Sept. 2 that it was beginning a tender offer for any and all of its $150 million of outstanding 1¼% notes, and a related solicitation of noteholder consents to proposed indenture changes.

It initially set 5 p.m. ET on Sept. 15 as the consent deadline and said the tender offer would expire at 5 p.m. ET on Oct. 1 (both deadlines were subsequently extended).

The company was originally offering 110.5% of the principal amount for each note tendered, including a consent payment of 3% of the principal amount. It said that holders tendering after the consent deadline but before the offer expires would receive the tender price of 107.5% of the principal amount, but no consent payment. All tendering holders would additionally receive accrued and unpaid interest up to, but not including, the payment date.

On Sept. 15, Hanger increased the consent payment to 4% of the principal amount from the original 3% (effectively increasing the total consideration, though not the basic tender offer price).

The company said the tender offer would be conditioned upon the consummation of a new $150 million term loan, which is entirely prepayable and expected to have a lower interest rate than the debt it will replace. Hanger intends to use the net proceeds from the loan to fund the purchase of the senior subordinated notes pursuant to this tender offer.

Lehman Brothers Inc. is the dealer manager for the tender offer and solicitation agent for the consent solicitation (call the Liability Management Group at 800 438-3242 or collect at 212 528-7581). D.F. King & Co. Inc. is the information agent (888 567-1626).

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