Harbinger seeks consents to sell up to $150 million more 10 5/8% notes

By Susanna Moon

Chicago, June 15 - Harbinger Group Inc. said it is soliciting holder consents to issue up to $150 million additional 10 5/8% senior secured notes due 2015.

Specifically, the company is seeking consents to amend the note indenture to revise the definition of "contribution debt" to permit the company to incur, as a result of its prior issuance of convertible preferred stock, up to $150 million of additional debt with the same maturity and secured equally and ratably with the existing notes as contribution debt while eliminating the ability of the company to incur any further pari-passu obligations as "permitted debt."

The result is to combine the two baskets, with the amount of permitted pari-passu obligations limited to $500 million, including the existing notes, but to permit all the debt to have the same maturity as the notes, including through the issuance of additional notes, according to a company press release.

Under the indenture, the company said it currently is permitted to incur additional pari-passu obligations secured by liens on the collateral securing the notes under two baskets: $50 million of additional debt and additional pari-passu obligations as "contribution debt" with a maturity after the maturity of the existing notes, so long as such contribution debt and other pari-passu obligations do not exceed $500 million.

Holders will receive a cash payment for delivered consents if Harbinger receives the required consents from holders of at least a majority of the notes, excluding those owned by the company and its affiliates. The company did not specify the amount in the release.

Holders must deliver their consents by 5 p.m. ET on June 22. They must be of record as of 5 p.m. ET on May 10.

Delivered consents may be revoked at any time before the earlier of the execution of the supplemental indenture or the expiration time.

The company said it believes that issuing any new additional debt as additional notes rather than a separate series of notes will enhance the liquidity of the existing notes and the additional notes. There can be no assurance, however, that such liquidity will actually develop or persist over time, the company added.

Credit Suisse Securities (USA) LLC (800 820-1653 or collect 212 538-2147) is the solicitation agent. Global Bondholder Services Corp. (866 470-3700 or collect 212 430-3774) is the information agent.

Wells Fargo Bank, NA is trustee.

Harbinger Group is a diversified holding company based in New York. The company's principal operations are conducted through subsidiaries that offer life insurance and annuity products and branded consumer products.

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