Comdisco to redeem more 11% '05 notes

Comdisco Holding Co. Inc. said on Friday (Jan. 24) that it plans to make a further optional partial redemption of $50 million of its 11% subordinated secured notes due 2005 (out of a total currently outstanding amount of $285 million, bringing the amount outstanding following the transaction down to $235 million). The redemption is the latest in a recent series of such transactions.

The notes will be redeemed on Feb. 10 at a price of par plus accrued and unpaid interest up to the redemption date.

Wells Fargo Bank will serve as the paying agent for this redemption.

AS PREVIOUSLY ANNOUNCED, Rosemont, Ill.-based Comdisco, which formerly provided equipment leasing and technology services to business customers, emerged following its Chapter 11 bankruptcy reorganization as a holding company whose purpose is to sell, collect or otherwise reduce to money the remaining assets of the corporation.

It said on Oct. 9 that it would redeem the entire $400 million outstanding principal amount of its variable-rate senior secured notes due 2004 on or about Oct. 21, at par plus accrued and unpaid interest from Aug. 12 to the redemption date. Comdisco said that Wells Fargo Bank would serve as the paying agent for the planned note redemption.

On Oct. 23, Comdisco said that the redemption of all $400 million of the variable rate senior notes had taken place as scheduled on Oct. 21.

Comdisco also said that following the redemption of those notes, it would make cash interest payments on the 11% notes. It explained that terms of the 11% subordinated notes provided for the interest to be paid-in-kind through the issuance of additional 11% subordinated notes while the senior notes were outstanding. It said the initial interest payment date for the subordinated notes would be Dec. 31 and the cash interest payment would be made on that date to registered holders of record (as of the close of business on Dec. 15) of the 11% notes.

On Oct. 29, Comdisco said that it would make a partial redemption of $65 million of the outstanding principal amount of the 11% notes (out of the $650 million which were outstanding at that time), under its mandatory redemption obligations. Comdisco said the notes would be redeemed at par plus accrued and unpaid interest from Aug. 12 to the redemption date. It anticipated that the partial redemption of the notes would occur on Nov. 14, and that Wells Fargo Bank would serve as the paying agent for that redemption.

On Nov. 15, Comdisco said that it had redeemed the $65 million of 11% notes on Nov. 14, as previously announced.

Comdisco said on Dec. 9 that it would make a redemption of another $200 million of the 11% notes (out of the then-current total outstanding amount of $585 million). It said that the notes would be redeemed at par plus accrued and unpaid interest from Aug. 12 to the redemption date. The company anticipated that the partial redemption of the notes would occur on Dec. 23, with Wells Fargo Bank serving as the paying agent for that redemption.

On Dec. 23, Comdisco said that it had completed the previously announced partial redemption of $200 million 11% notes, out of the total previously outstanding amount of $585 million, bringing the remaining total outstanding amount down to $385 million. The notes were redeemed at par plus accrued and unpaid interest from Aug. 12 to the Dec. 23 redemption date.

Comdisco also announced that it would make optional further partial redemption of $100 million of the 11% notes, out of the then-currently outstanding $385 million. It said it would redeem the notes at par plus accrued and unpaid interest, up to the redemption date of Jan. 9.

On Jan. 9, Comdisco said that it had completed the previously announced partial redemption of $100 million of its 11% notes (out of a total previously outstanding amount of $385 million, bringing the amount outstanding following the transaction down to $285 million). Wells Fargo Bank served as the paying agent for this redemption.

Abraxas completes exchange for 11½% '04 notes; repays 12 7/8% '03 notes

Abraxas Petroleum Corp. said on Friday (Jan. 24) that it had completed its previously announced offer to exchange cash, stock and new debt for its existing Series A and Series D 11½% senior secured notes due 2004. The offer was not extended further beyond the previously announced deadline of 12 midnight ET on Jan. 22.

Abraxas said that the offer was closed with approximately $180 million of the approximately $189 million outstanding 11½% notes having been tendered and accepted for exchange under the previously announced terms; the remaining notes not tendered were discharged.

Abraxas concurrently announced the completion of several other transactions in addition to the tender offer, including the closing of the sale of the capital stock of its Canadian Abraxas Petroleum Ltd. and Grey Wolf Exploration Inc. subsidiaries to a Canadian royalty trust for approximately $138 million and the closing of a new senior secured credit facility that includes a revolving credit facility of up to $50 million with an initial borrowing base of $45.5 million, of which $42.5 million was used to fund the 11½% note exchange offer.

Abraxas further said that it had also repaid and discharged its $63.5 million outstanding principal amount of 12 7/8% senior secured notes due 2003, out of the proceeds of the transactions described above.

It said that while the sale of the Canadian Abraxas and Grey Wolf properties had reduced Abraxas' total proved energy reserves (as of Dec. 31, 2001) by 36%, the accompanying transactions reduced its long-term debt (pro forma as of Sept. 30, 2002) by 45% and reduced its cash interest expense (pro forma as of Sept. 30, 2002) by 90%.

Jefferies & Co. Inc. acted as dealer manager of the exchange offer and Mellon Investor Services LLC acted as information agent.

AS PREVIOUSLY ANNOUNCED: Abraxas, a San Antonio, Tex.-based independent oil and natural gas exploration and production company, said on Dec. 9 that it was beginning the exchange offer for its 11½% notes, which the company had jointly issued along with its wholly owned subsidiary, Canadian Abraxas Petroleum Limited.

Abraxas said that it would offer the holders of the existing notes a package consisting of $264 in cash, $610 principal amount of new 11½% series A senior secured notes due 2007 (Abraxas subsequently corrected this to 11½% series A secured notes due 2007 in a press release Thursday, Dec. 12), and approximately 31.36 shares of Abraxas common stock, per $1,000 principal amount of the existing notes tendered. .

Abraxas said that the interest on the new notes would be payable in cash unless prohibited; if cash interest payments are prohibited, interest would be paid in kind (i.e. paid in the form of additional new notes) in principal amount equal to the amount of the accrued and unpaid interest on the new notes, plus an additional 1% per annum accrued interest for the applicable period.

Abraxas further said that the notes and shares of its common stock to be issued in the exchange offer have not been registered for unrestricted public trading under the Securities Act of 1933, as amended.

On Dec. 12, Abraxas, in addition to correcting the nomenclature of the new notes being offered as part of the exchange offer consideration, said that the offer would expire at 12 midnight ET on Tuesday (Jan. 7).

On Jan. 8, Abraxas said that it had extended the exchange offer until 6 p.m. ET that day, subject to possible further extension, from the originally announced Jan. 7 deadline. As of the close of business on Jan. 7, $149.8 million principal amount of the notes had been validly tendered or guaranteed - well below the required minimum tender. The deadline was subsequently extended several times, with the minimum tender threshold still not having been reached.

On Jan. 15, Abraxas said that it had again extended its exchange offer to 12 midnight ET this past Wednesday (Jan. 22), subject to possible further extension, from its previous deadline at 12 midnight ET on Jan. 14.

As of the close of business on Jan. 14, $158.1 million principal amount of the notes had been validly tendered or guaranteed - up from the $151 million which had been tendered or guaranteed by the prior deadline on Jan.13, but still well below the minimum tender threshold of 99% of the approximately $189 million of outstanding notes, a condition for the completion of the offer, among other conditions.

XM Satellite Radio exchange offer for 14% '10 notes expires

XM Satellite Radio Holdings Inc. said on Friday (Jan. 24) that it had completed its previously announced offer to exchange new debt, cash and equity warrants for XM's outstanding 14% senior secured notes due 2010. That offer expired as scheduled at 12 midnight ET on Thursday (Jan. 23) without extension; as of that deadline, $300.2 million of the notes, or 92% of the outstanding amount, had been tendered by their holders under terms of the exchange offer. Settlement and closing for the exchange offer is expected to be completed on Tuesday (Jan. 28).

The company said it also expects to complete its concurrent $475 million financing package involving General Motors Corp. and a group of investors upon completion of the note exchange offer. Completion of these transactions is subject to customary closing conditions.

Bank of New York was the depositary for the exchange offer. D.F. King Inc. was the information agent.

AS PREVIOUSLY ANNOUNCED, XM Satellite Radio, a Washington D.C.-based satellite radio broadcaster, said on Dec. 23, 2002, that it had agreed to enter into financing transactions totaling $450 million aimed at improving its liquidity. These would include a $200 million equity investment by a group on investors and $250 million of payment arrangements and credit facilities with General Motors. XM also said at that time that it planned to exchange new notes, cash and warrants for up to 90% of the existing 14% notes, but gave no further details of the proposed exchange offer at that time.

On Dec. 24, XM formally announced that it was beginning the previously announced exchange offer and consent solicitation under which the company would seek to exchange a package of new notes, cash and common stock warrants for at least 90% of its $325 million of outstanding 14% senior secured notes due March 15, 2010.

The company said the exchange offer would expire at 12 midnight ET on Jan. 23, subject to possible extension.

XM said it was offering up to $474.2 million (aggregate principal amount; $325 million accreted value) of its new 14% senior secured discount notes due Dec. 31, 2009, plus up to $22.75 million in cash and warrants to purchase up to 27.625 million shares of XM's Class A common stock at $3.18 per share.

On an individual basis, the consideration breaks down to a package consisting of $1,459 principal amount at maturity ($1,000 accreted value as of March 15, 2003) of XM's new 14% senior secured discount notes due Dec. 31, 2009, plus $70 in cash, and a warrant to purchase 85 shares of XM's Class A common stock at $3.18 per share, per $1,000 principal amount of existing notes tendered.

The company said the new notes would accrete interest until Dec. 31, 2005, after which time XM would make semi-annual cash interest payments beginning on June 30, 2006. The new notes would be secured by substantially all of the company's assets (excluding real property), in contrast to the security for the existing notes, which is limited to the capital stock of XM's FCC license subsidiary.

XM also said that it would solicit consents to amend the existing notes' indenture to, among other things, eliminate or substantially amend all of the restrictive covenants, other than covenants requiring payment of interest on the notes and principal, when due. It said that noteholders could not deliver consents without tendering existing notes in the exchange offer.

The company said that financing transactions concurrently announced with the exchange offer would be contingent upon, among other things, 90% participation by existing noteholders in the exchange offer, although XM reserved the right to waive that requirement with the consent of General Motors and 66 2/3% of the investors in the financing transaction (the minimum participation level was subsequently lowered and may be lowered yet again).

On Jan. 15, XM said that it had received the necessary consents from General Motors Corp. and from its investor group (which together are providing $450 million in new financial investment and support) to lowering the minimum participation threshold for its exchange offer for its 14% notes.

XM said that the investor group and GM had okayed lowering the minimum participation level to 75% from the originally announced 90%.

XM additionally said that it had amended the exchange offer to further reduce the minimum participation condition to 50.1%. However, as described above, the General Motors and investor group financing transactions were conditioned upon 75% participation by existing noteholders in the exchange offer, and XM said it would close on the exchange offer only if the minimum participation condition to the financing transactions were to be satisfied or waived, which would require agreement by GM and two-thirds of the investor group.

XM said that all other terms and conditions of the existing exchange offer and consent solicitation remain unaffected by the change.

On Jan. 17, XM said that it had increased its financing commitments to $475 million (from the originally announced $450 million) with an additional $25 million commitment from investors spearheaded by Everest Capital Ltd. which has committed $15 million of the additional $25 million investment commitment. Everest also holds an investment position in XM's outstanding 14% notes and indicated its intent to participate in XM's exchange offer for those notes.

The company said that Everest and the other additional investors would invest in XM's proposed 10% senior secured convertible discount notes due 2009.

On Wednesday (Jan. 23), XM said that it had already received tenders and consents from holders of a majority of the outstanding 14% notes and it noted that once tendered, there would be no withdrawal rights.

The company additionally announced that it had received the necessary consents from General Motors and from its investor group to lower the minimum noteholder participation threshold in the exchange offer to 50.1%. XM said that as a result, it anticipated being able to complete the exchange offer and close the previously announced funding package subject to customary closing conditions.

BWAY Corp. gets needed consents from holders of 10¼% '07 notes

BWAY Corp. said Thursday (Jan. 23) that it had received the requisite consents to proposed amendments to the indenture governing its 10¼% Series B senior subordinated notes due 2007 in the course of its previously announced tender offer for those notes. The consents were received by the previously announced consent deadline, and the company said that under the terms of the consent solicitation, such consent solicitation would now officially expire at 5 p.m. ET on Friday (Jan. 24), which would be designated the consent expiration date.

As of the close of business on Thursday, approximately $99 million of the $100 million outstanding principal amount of the 10¼% notes had been tendered.

The tender offer meanwhile will continue, and is slated to expire at 12 midnight ET on Feb. 6, subject to possible extension.

Deutsche Bank Securities Inc. (call 212 469-7466) is the dealer manager for the tender offer and the consent solicitation. MacKenzie Partners, Inc. (call 800 322-2885 is the Information Agent. BNY Midwest Trust Co. (call 212 815-3738) is the depositary for the offer.

AS PREVIOUSLY ANNOUNCED: BWAY, an Atlanta-based manufacturer of steel containers for industrial applications said on Jan. 8 that it had begun a cash tender offer to purchase any and all of its $100 million of outstanding 10 ¼% notes, and was also soliciting consents from the noteholders to proposed indenture changes.

BWAY set 5 p.m. ET on Jan. 23 as the consent deadline by which holders would be required to tender their notes and deliver related consents in order to receive a special consent payment as part of their total compensation, and set 12 midnight ET on Feb. 6 as the offer expiration, with both deadlines subject to possible extension.

The company said total consideration payable for each validly tendered note and properly delivered consent would be $1,051.25 per $1,000 principal amount of notes, plus accrued and unpaid interest up to, but not including, the date of payment. Total consideration would include a $5 per $1,000 principal amount consent payment for holders tendering their notes at or before the consent deadline. Holders tendering their notes after the consent deadline would receive $1,046.25 per $1,000 principal amount, plus accrued and unpaid interest, but would not receive the consent payment as part of their consideration.

It said that holders tendering their notes prior to the consent deadline would be required to consent to the proposed amendments, and holders consenting to the amendments would be required to tender their notes.

The company said the purpose of the tender offer and consent solicitation was to amend the Indenture governing the notes to eliminate substantially all of the restrictive covenants contained in the Indenture, in order to increase BWAY's operational flexibility and to facilitate the merger of BWAY with an affiliate of Kelso & Co., LP, a private investment firm, a transaction which was announced on Oct. 1, 2002.

BWAY said the tender offer and consent solicitation and payment of the related consideration would be subject to, among other things, the consummation of the Kelso merger and the now-satisfied condition of receipt of valid consents to the consent solicitation from at least a majority in aggregate principal amount of the outstanding notes on or prior to the consent deadline.

Herbst Gaming extends and amends 10¾% '08 note consent solicitation

Herbst Gaming, Inc. said Thursday (Jan. 23) that it had extended its previously announced solicitation of noteholder consents to proposed changes in the indenture of its 10¾% senior secured notes due 2008. The solicitation was extended to 5 p.m. ET that day, subject to possible further extension, from the originally announced deadline of 5 p.m. ET on Wednesday (Jan. 22).

Herbst also announced that it would pay consenting noteholders $3.75 in cash per $1,000 principal amount of notes for which they were submitting consents, up from the originally offered $1.25 cash per $1,000 principal amount.

Lehman Brothers Inc. (call 800 438-3242 or 212 528-7581) is the solicitation agent; D.F. King & Co., Inc. (call 800 829-6551; banks and brokers call 212 269-5550) is the information agent for the solicitation.

AS PREVIOUSLY ANNOUNCED: Herbst, a , a privately held Las Vegas-based casino operator and slot machine route operator, said on Jan. 13 that it would solicit consents from the registered holders of record (as of 5 p.m. ET on Friday, Jan.10) of its 10¾% notes to amending certain provisions of the notes' indenture.

Herbst said the solicitation would expire at 5 p.m. ET on Jan. 22 (the deadline was subsequently extended).

It said that completion of the consent solicitation would be conditioned upon - among other things - the receipt of valid consents to the proposed indenture changes by from the holders of at least 66 2/3% of the principal amount of outstanding notes. The company did not specify the nature of the planned indenture changes in its announcement.

Herbst said that upon its receipt of the required consents and upon execution of a supplemental indenture putting into effect the proposed amendments, Herbst would pay a cash consent payment of $1.25 per $1,000 principal amount of the notes for which a consent was given and not subsequently revoked (the consent payment was subsequently increased).

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