Brand Services extends, sets price for 10¼% '08 notes tender

Brand Services, Inc. (B3/B-) said on Monday (Oct. 7) that it had extended the expiration date for its pending tender offer for its outstanding 10¼% senior notes due 2008 until 9 a.m. ET on Oct. 15, subject to possible further extension. The tender offer had been scheduled to expire at 9 a.m. ET on Oct. 10. The tender offer was extended pending the completion of the financing of the St. Louis-based scaffolding company by J.P. Morgan Partners from DLJ Merchant Banking.

The tender offer and related solicitation of noteholder consents began on Aug. 28, although the company did not release a public announcement at that time. It initially set Sept. 12 as the consent payment deadline and Oct. 10 as the expiration deadline, with the pricing for the offering to take place on Oct. 7, based on an 87.5-basis point fixed spread over the yield that afternoon of the reference security, the 6¼% U.S. Treasury note due Feb. 15, 2003.

The company said late in the session Monday that it had set the total consideration it would pay for the notes at $1,076.15 per $1,000 principal amount of notes tendered, including a $20 per $1,000 principal amount consent payment for those holders who tendered their notes by the now-passed consent deadline, thus consenting to the proposed indenture changes. Holders who did not tender by that deadline are to receive just the basic tender offer consideration of $1,056.15 per $1,000 principal amount. The assumed payment date will be Oct. 16.

The acquisition of Brand Services - including the tender offer for the $130 million of 10¼% notes - was to be funded with the proceeds of the company's new high yield bond offering. On Friday (Oct. 4), the company was heard to have sold $150 million of new 12% senior subordinated notes due 2012, downsized from the originally planned $165 million.

The depositary for the tender offer has advised the company that, as of 5 p.m. ET on Oct. 4, holders of notes had tendered and not withdrawn $130 million aggregate principal amount of notes, representing 100% of the notes outstanding.

Credit Suisse First Boston Corp. (call the Liability Management Group at 212 538-8474 or toll-free at 800 820-1653) and J.P. Morgan Securities Inc. (call 212 270-1100 or toll-free at 800 245-8812) are the Dealer Managers for the tender offer. MacKenzie Partners, Inc. (call 212 929-5500 or toll-free at 800 322-2885) is the information agent for the offer.

Nationwide Credit again extends 10¼% '08 note exchange offer

NCI Holdings, Inc. and Nationwide Credit, Inc. (Ca) said on Friday (Oct. 4) that they had again extended their pending offer to exchange all of Nationwide's outstanding 10¼% senior notes due 2008 for common stock of NCI Holdings, Inc. The offer was extended to 5 p.m. ET this coming Friday (Oct. 11), subject to possible further extension, from the previous Oct. 4 deadline. Nationwide said that to date, it has received tenders of senior notes from the holders of approximately 71.3% of the outstanding notes under the terms of the exchange offer, unchanged from the previous week and unchanged from the amount reported on Aug. 30.

The transaction is being handled by State Street Bank and Trust Co., the depository for the offer as well as trustee for the notes.

AS PREVIOUSLY ANNOUNCED, NCI Holdings and Nationwide Credit Inc., a Kennesaw, Ga.-based financial services company, said on July 12 that their pending exchange offer for the 10¼% notes had been extended to 5 p.m. ET on July 19. The offer had not been publicly announced previously. The company said that as of July 12, it had received tenders of senior notes from the holders of approximately 67.9% of the outstanding notes under the terms of the exchange offer. On July 19, NCI and Nationwide announced that they had again extended the exchange offer to 5 p.m. ET on July 26 from the previous July 19 deadline, and said that as of the previous deadline, they had received tenders of approximately 68.5% of the outstanding notes, up from 67.9% reported on July 12, when the offer had last been previously extended. Although the exchange offer was subsequently extended past the July 26 deadline, no public announcement was made at that time; the next announcement, on Aug. 16, again extended the exchange offer to 5 p.m. ET on Aug. 23, subject to possible further extension, and said that to date, the company had received tenders of senior notes from the holders of approximately 71.6% of the outstanding notes under the terms of the exchange offer, up from 68.5% reported on July 19.

On Aug. 23, Nationwide said it had again extended the exchange offer to 5 p.m. ET on Aug. 30, subject to possible further extension, and said that to date it has received tenders of senior notes from the holders of approximately 71.3% of the outstanding notes, down slightly from the 71.6% reported on Aug. 16. On Aug. 30 and again on Sept. 6, Sept. 13, Sept. 20 and Sept. 27, Nationwide said that it had once again extended the exchange offer, to 5 p.m. ET each on Sept. 6, Sept. 13, Sept. 20, Sept. 27 and Oct. 4, respectively, subject to possible further extension. Each time it said that to date, it had received tenders of the senior notes from the holders of approximately 71.3% of the outstanding notes, unchanged from the amount reported on Aug. 23.

Doe Run Resources extends revised exchange offer for notes

The Doe Run Resources Corp. (Ca/D) said on Friday (Oct. 4) that it had extended its previously announced revised offer to exchange new debt and warrants for all of its outstanding 11¼% Series B senior secured notes due 2005, 11¼% Series B senior notes due 2005 and floating interest rate Series B senior notes due 2003. That offer, which was to have expired on Friday has now been extended to 5 p.m. ET on Oct. 15, although Doe Run, as previously announced, is not expected to again extend the offer, but will proceed to either consummate the offer as scheduled or commence a Chapter 11 reorganization, assuming it has received requisite participation from its noteholders as previously outlined.

Doe Run indicated that as of the Oct. 4 deadline, it had received indications of support for its revised offer from the holders of approximately 73% of the total outstanding amount of the three series of notes - less than the 95% of each series required to consummate the offer, causing the offer to be extended.

State Street Bank and Trust Co. in Boston (call 617 662-1548 or fax documents to 617 662-1452) is the exchange agent and the depositary for the offers. MacKenzie Partners, Inc. (call 212 929-5500 or toll-free 800 322-2885) is the information agent.

AS PREVIOUSLY ANNOUNCED: On April 15, The Doe Run Resources Corp, a St. Louis-based metals smelting company, announced that it had reached an agreement in principle with its corporate parent, New York-based industrial conglomerate The Renco Group, Inc. and with Regiment Capital Advisors, LLC, under which Renco and Regiment would provide Doe Run with significant capital that would enable Doe Run to restructure its existing debt. Doe Run said it planned to make a cash tender offer for a portion of its notes, and an exchange offer for the balance of the notes.

On May 16, Doe Run outlined the terms of the agreement in principle and announced its tender offer and exchange offer for the notes in an 8-K filing with the Securities and Exchange Commission, and announced further details of its planned refinancing, and officially began the tender offer and exchange offer on June 6. Doe Run subsequently extended the expiration deadlines for its tender and exchange offers several times, as the company attempted to obtain the required level of noteholder participation and to also hammer out the final terms of its planned new credit facility - part of the overall recapitalization of the company.

But on Aug. 23, Doe Run said that although it had by that point received tenders from holders representing 95% of the aggregate outstanding amount of its notes - an amount sufficient to satisfy the minimum tender conditions required for consummation of the offers in their then-current form - it would have to attempt to restructure the offers, citing the continuing market price erosion of its primary product, lead metal, which in turn had resulted in a decline in the company's available liquidity.

On Sept. 5, Doe Run said that it had reached an agreement in principle with major noteholder Regiment Capital Advisors, LLC on modifying the terms of its then-existing offers, eliminating the cash tender offer and senior loan participation which was at that time being offered to the noteholders. The exchange offer would meanwhile be amended to give each exchanging holder of the senior notes due 2005 and the floating interest rate senior notes due 2003 $560 principal amount of the newly issued exchange notes per $1,000 principal amount of the existing notes successfully exchanged, and to give each exchanging holder of the senior secured notes due 2005 $660 principal amount of the new exchange notes per $1,000 principal amount of the existing notes successfully exchanged. Each holder of existing notes would also receive a pro-rata share of warrants exercisable for an aggregate of 40% of the outstanding common stock of Doe Run, assuming the participation by the holders of all of the outstanding existing notes. The warrants would be allocated to exchanging noteholders according to the percentage that the existing notes successfully tendered for exchange by each holder bears to the aggregate amount of all of the existing notes outstanding.

Doe Run additionally said that the previously announced Senior Loan connected with the company's restructuring would be in an aggregate amount of $15.5 million, would mature thirty months from the closing of the transaction, would bear interest at an annual 11¼% rate, would not require any amortization payment until maturity and said that all warrants previously associated with the Senior Loan have been eliminated. It further said that the minimum tender required to effectuate the revised exchange offer would be 95% of each series of existing notes outstanding.

The company said that the new exchange notes would mature on Nov. 1, 2008, and bear interest payable semiannually, as follows: Through calendar year 2005, interest may be paid, at the sole option of Doe Run, at the annual rate of either 3% in cash and 11% paid in kind [i.e. in additional notes] OR 8% paid solely in cash. For all interest payment dates after calendar year 2005 and until the exchange notes mature, interest would be payable semiannually, and only in cash, at the annual rate of 11¼%. It said that the collateral securing the Senior Loan and the exchange notes would be substantially similar to that previously set forth in the official Offering Memorandum.

Doe Run said that to the best of its knowledge, holders of approximately 95% of the aggregate amount of the outstanding existing notes had to date tendered their notes for participation in the existing (or old) offers. It said that holders desiring to tender their notes into the revised exchange offer and related consent solicitation would have to fill out new Letters of Transmittal and could get information on the procedure from the information agent for the offer or from their broker, dealer, commercial bank or trust company.

On September 23, Doe Run said that it had formally begun a revised exchange offer and related consent solicitation for all of its outstanding 11¼% senior and senior secured notes, and for its floating interest rate notes, with the revised offer to exchange new notes and warrants for the company for the existing notes superseding Doe Run's previously announced exchange offer for those securities. The general terms of the revised offer had already been previously announced. It was scheduled to expire at 5 p.m. ET on Oct. 4 , although the company said it reserved the right to extend the offer to a second expiration date of Oct. 15, at which time the company said it expected to either consummate the exchange offer as planned, subject to the satisfaction of the minimum tender condition and all of the other conditions outlined in its offer, or, alternatively, to commence a Chapter 11 reorganization case (the offer was in fact subsequently extended to this second expiration deadline).

In addition to offering to exchange the existing notes for the newly issued notes and warrants under the terms of the revised offer, Doe Run said it was soliciting consents to proposed changes in the indentures of the existing notes to eliminate substantially all of the restrictive operating and financial covenants and modify a number of the event-of-default provisions and various other provisions in the existing notes. The tender of those notes in the exchange offer would constitute consent to those amendments.

Doe Run said that if a noteholder were to not tender its existing notes and the exchange offer were to be consummated anyway, Doe Run may leave such unexchanged old notes outstanding, but also reserves the right - but is under no obligation - to purchase such notes in open market purchases, negotiated transactions or otherwise, for consideration either similar to or different from that offered in the exchange offer; to defease such notes pursuant to the terms of their indentures; or as otherwise agreed with the holder of such existing notes, to redeem the notes in accordance with their terms. Such potential transactions would be subject to the terms of the New Senior Credit Facility and the Congress/CIT Credit Facility into which the company is entering.

Doe Run said that in the event that such existing notes are not tendered under the exchange offer and are left outstanding and the exchange offer is successfully consummated, holders of the still- outstanding notes would not be entitled to the benefit of substantially all of the restrictive operating and financial covenants and certain event of default provisions presently contained in the indentures for those notes, once the proposed amendments have been approved and take effect,

Doe Run further said that it was simultaneously seeking acceptances from the holders of its existing notes to the previously outlined restructuring/reorganization plan. If the Minimum Tender (of at least 95% of each series of the outstanding notes) is not achieved but the requisite acceptances needed for confirmation of the pan are achieved (from (a) holders of at least 66 2/3% of the aggregate principal amount of each of the three series of notes and (b) a majority in number of holders, in each case actually voting on the plan, Doe Run intends to commence a Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of New York and to seek to have the Court confirm the Plan. Doe Run said that noteholders desiring to tender their notes under the revised offer and consent solicitation would have to fill out a revised Letter of Transmittal.

Hawk Corp. extends, amends 10¼% '03 notes exchange

Hawk Corp. (B2/B-) said Friday (Oct. 4) that it has extended the offer expiration and consent payment deadlines on its previously announced offer to exchange new 12% senior notes due 2006 for its outstanding 10¼% senior subordinated notes due 2003 and the related solicitation of noteholder consents to proposed changes in the notes' indenture. Those deadlines were both extended to 5 p.m. ET this coming Friday (Oct. 11), subject to possible further extension, from the previous deadline this coming Thursday (Oct. 10).

Hawk also said that it was modifying certain restrictive covenants and other related provisions of the new (12%) notes' indenture. The changes are described in detail in a supplemental prospectus, dated Oct. 4, that has been filed with the Securities and Exchange Commission and sent to the holders of the existing notes, although the company said publicly that neither the cash coupon or maturity date of the new notes, nor the consent payment under the offer, has been changed. As of 5 p.m. ET on Oct. 3, $15.147 million of the existing notes had been tendered and not withdrawn in the exchange offer.

Banc of America Securities will be the exclusive dealer-manager for the exchange offer and consent solicitation; D.F. King & Co. (banks and brokerage firms should call 212 269-5550; all others should call 800 290-6430) will be the information agent, and HSBC Bank USA will be the exchange agent.

AS PREVIOUSLY ANNOUNCED, Hawk Corp., a Cleveland-based manufacturer of friction products and precision industrial components, said in an S-4 filing with the Securities and Exchange Commission on Aug. 2 that it was beginning an offer to exchange new debt for its $64.725 million of outstanding 10¼% notes and was also soliciting the consent of the noteholders to proposed indenture changes. Hawk said it would exchange the new notes for the existing notes in order to extend the maturity of its debt, although neither the maturity nor the coupon of the proposed new notes was immediately specified in the filing. Hawk said that its domestic subsidiaries would guarantee the payment of interest and principal under the new notes. Hawk also did not formally set an expiration deadline for the offer, nor did it set a deadline for its consent solicitation. It said that the exchange offer and consent solicitation would be subject to the valid tenders of at least a majority of the outstanding notes, and subject to the refinancing of the existing credit facility on terms acceptable to the company and to other customary conditions.

Hawk said that holders tendering their notes would be deemed to have consented to the proposed indenture amendments, which would essentially eliminate all of the restrictive covenants, while holders would have to tender their notes in order to grant consent. It said that holders could withdraw tenders of the outstanding notes at any time before Hawk notifies the trustee for the old notes that it has received valid and unrevoked consents representing a majority of the outstanding notes. Hawk further said that it intends to pay a consent payment for notes tendered by the as-yet-unspecified consent deadline, but it did not specify the amount of that payment in its filing. Any notes which remain outstanding after the expiration of the exchange offer would be subject to the indenture changes, even if the holder did not tender the notes and grant consent.

On Sept. 12, Hawk filed an amendment to its previous S-4 filing, offering specific details about the tender offer for its 10¼% notes and the related consent solicitation. Hawk said initially that the offer to exchange the new notes for existing notes would expire at 5 p.m. ET on Thursday (Oct. 10), while the consent solicitation deadline would be 5 p.m. ET on Oct. 3, (both deadlines were subsequently extended).

Hawk said that it would exchange $1,025.63 principal amount of newly issued 12% senior notes due 2006 per $1,000 principal amount of the existing notes; that total consideration figure includes a consent payment of $25.63 principal amount of the new notes per $1,000 principal amount of the existing notes, for consents received by the consent payment deadline. Hawk will also pay all tendering holders accrued and unpaid interest, in cash. It said that besides having a different coupon and maturity date, the new notes would have different interest payment dates and a different optional redemption schedule than the old notes and some additional limitations on Hawk's ability to incur debt. Under certain circumstances, the company said it might be required to pay additional interest, which could be paid in the form of additional new notes. The other terms of the new notes will be substantially the same as the old notes (before giving effect to the proposed amendments to the old indenture). On Oct. 2, Hawk said that it had extended the consent payment deadline to 5 p.m. ET on Thursday (Oct. 10), subject to possible further extension, from the originally announced deadline of 5 p.m. ET on Oct. 3. The consent deadline, as extended, thus coincides with the expiration deadline for the exchange offer (both were subsequently extended).

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