American Greetings completes tender offer for 11¾% notes

New York, May 12 - American Greetings Corp. (Ba2/BB+) said it had successfully completed its previously announced tender offer and related consent solicitation for its outstanding 11¾% senior subordinated notes due 2008, which expired as scheduled at 9 a.m. ET Wednesday without extension.

As of that deadline, $186.186 million of the notes had been tendered under the terms of the offer.

As previously announced, American Greetings, a Cleveland-based greeting card company, said on April 14 that it had begun a cash tender offer for its $196.4 million of outstanding 11¾% notes to reduce future interest expense and increase financial flexibility and said it was also soliciting noteholder consents to amend the notes' indenture to eliminate certain restrictive covenants and events of default.

It set a consent deadline of 5 p.m. ET on April 27 and said the tender offer would expire at 9 a.m. ET on May 12.

American Greetings said it would set the purchase price at 2 p.m. ET on May 7, based on the redemption price of the notes on their first call date of July 15, 2005 plus scheduled interest to that date, discounted by a yield to that date of the 1.5% U.S. Treasury note due July 31, 2005 plus 50 basis points.

The company said the total consideration would include a $20 per $1,000 principal amount consent payment for holders tendering their notes and delivering consents by the consent deadline; holders tendering after that would receive the tender offer consideration but not the consent payment. All tendering noteholders would also receive accrued interest up to, but not including, the payment date.

The company said conditions to the offer would include execution of an amendment to American Greetings' revolving credit facility and the tender of and the receipt of consents from holders of at least a majority of the principal amount of the notes.

On April 28, American Greetings said it had received sufficient consents from the 11¾% noteholders by the now-expired April 27 consent deadline to amend the indenture.

On May 7, the company said that it had set the pricing for its tender offer, according to the previously announced formula. It set total consideration at $1,162.37 per $1,000 principal amount of notes tendered and accepted for purchase, and said the tender offer consideration payable to holders who tendered after the consent deadline expired, would be $1,142.37 per $1,000 principal amount.

UBS Securities LLC was the dealer manager and solicitation agent (888 722-9555 ext. 4210). Global Bondholder Services was the information agent (212 430-3774).

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