Acelity units get $445.06 million 12½% notes in exchange offer so far

By Angela McDaniels

Tacoma, Wash., Sept. 20 – Acelity LP Inc. said holders had tendered $445,061,000 principal amount, or 72.72%, of the 12½% senior notes due 2019 issued by Kinetic Concepts, Inc. and KCI USA, Inc. as of 5 p.m. ET on Sept. 19, the early tender and consent date.

The issuers are offering up to $450 million principal amount of new 12½% limited third-lien senior secured notes due 2021 in exchange for a portion of the existing 12½% notes in a private exchange offer, according to a company news release.

The exchange offer will end at midnight ET on Oct. 3.

The issuers are offering $1,000 principal amount of new notes in exchange for each $1,000 principal amount of existing notes tendered by the early tender and consent date. This includes an early participation premium of $50 principal amount of new notes.

In addition, the issuer will pay accrued interest up to but excluding the settlement date.

The issuers will accept for exchange an amount of existing 12½% notes that will result in no more than $450 million principal amount of new notes being issued in the exchange offer.

If the exchange offer is oversubscribed, notes will be accepted for exchange on a pro rata basis.

As of June 30, there was $612 million principal amount of the existing 12½% notes outstanding.

The issuers are also soliciting consents to some proposed amendments to the indenture governing the existing 12½% notes. They are not offering a consent fee.

As of the early tender and consent date, the issuers have received consents from the holders of at least a majority of the outstanding principal amount of notes, enough to make the amendments. The issuers will enter into a supplemental indenture giving effect to the proposed amendments.

The consent solicitation and the effectiveness of the supplemental indenture are not conditioned on the completion of the exchange offer.

The exchange offer is subject to conditions that include a $100 million equity contribution by Acelity's sponsors and the consummation of an offering of new second-lien senior secured notes.

Kinetic Concepts and KCI USA priced $1.75 billion of five-year second-lien senior secured notes (Caa1/B-) at par to yield 9 5/8% on Sept. 13, according to a syndicate source.

The information and exchange agent is D.F. King & Co., Inc. (800 207-3159, 212 269-5550 or www.dfking.com/kinetic).

Acelity is a wound care and regenerative medicine company based in San Antonio.

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