Holmes Group gets indenture consents for 85% of 9 7/8% notes

New York, April 15 - The Holmes Group Inc. (Caa1/CCC+) said it has received sufficient consents to proposed indenture changes from the holders of its 9 7/8% senior subordinated notes due 2007, under its previously announced tender offer for those notes.

The company said the offer's consent deadline expired as scheduled at 5 p.m. ET on April 13 without extension; as of that time, it had received consents from holders of more than 85.3% of the 9 7/8% notes, which had been issued in two series, in November 1997 and February 1999.

As of the deadline, it had received tenders of notes and deliveries of related consents from holders of $67.15 million of the $81.775 million principal amount of 1997 notes outstanding, or 82.1% and from the holders of $18.3 million principal amount of 1999 notes outstanding, or 100%.

The consents are sufficient to put into effect the proposed indenture amendments. Holmes will execute supplemental indentures incorporating those changes. These supplemental indentures will only become operative if the company accepts the notes for payment under the terms of the tender offer. When the amendments become operative, they will be binding even on holders of notes not tendered for purchase in the tender offer.

The underlying tender offer meanwhile continues and is scheduled to expire on April 27, subject to possible extension.

As previously announced, Holmes Group, a Milford, Mass., consumer products company, said on March 30 that it had begun a cash tender offer and consent solicitation for all its outstanding 9 7/8% notes. Holmes said it was tendering for the notes as part of a refinancing of its debt.

It set a now-expired consent deadline of 5 p.m. ET on April 13 and said the offer would end at midnight ET on April 27, subject to possible extension.

Holmes said it would offer total consideration of $1,041.14 per $1,000 principal amount of the notes, including a consent payment of $20 per $1,000 principal amount for those notes tendered at or before the consent deadline. Holders would also receive accrued interest on their securities.

Holmes said that under the consent solicitation, it was seeking to eliminate substantially all of the restrictive covenants and certain events of default in the note indenture and to make other amendments.

It said that closing of the tender offer would be subject to conditions, including the closing and funding of new senior credit facilities and the now-fulfilled requirement that the company receive consents from holders of a majority by principal amount of the notes.

The company expects to repay both the notes and its existing senior secured bank credit facilities with proceeds of a new senior secured credit facility.

The refinancing is being undertaken to take advantage of current market opportunities in advance of the expiration of Holmes' existing senior bank credit facilities beginning in January 2005, the company added.

Credit Suisse First Boston LLC is dealer manager and solicitation agent for the tender offer (800 820-1653 or collect at 212 538-4807). Morrow & Co. Inc. is information agent (800 654-2468 or collect at 212 754-8000).

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