Illinois' Clare at Water Tower inks agreement in principle to exchange revenue bonds

By Caroline Salls

Pittsburgh, Feb. 18 - The Clare at Water Tower has reached an agreement in principle on an out-of-court restructuring and exchange offer with a group of holders of its Illinois Finance Authority fixed-rate revenue bonds and the bank providing letters of credit securing the company's variable-rate bonds, according to a notice released Thursday.

Under the proposed restructuring, The Clare at Water Tower would exchange $91.5 million of its outstanding fixed-rate bonds and extend the letters of credit supporting $125 million of tax-exempt variable-rate bonds and $12.5 million of taxable variable-rate bonds to 2014.

As part of the restructuring, the variable rate bonds would be subject to an out-of-court exchange following the expiration of the letters of credit in 2014.

The exchange offer for the fixed-rate bonds is subject to acceptance by holders of at least 95% in principal amount of those bonds. The company said fixed-rate bondholders not subject to the restructuring will also be required to accept the offer to reach the 95% threshold.

The agreement is subject to various approvals, including approval of the Illinois Finance Authority.

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