Korreden completes tender offers for notes, exchangeables due 2014

By Jennifer Chiou

New York, Nov. 18 - Korreden SA announced that it received tenders for €63,239,726, or 79.75%, of its €79,292,530 of senior notes due 2014 and €185,336,000, or 84.99%, of Hollandwide Parent BV's €218.06 million of exchangeable bonds due 2014 at the close of the offers.

The offers and concurrent consent solicitation expired at 11 a.m. ET on Nov. 17.

Because the company received consents from holders of more than 90% of the securities, it executed a supplemental indenture.

The offer for Korreden's notes due 2014 was held by its parent company, Qualis SCA, while the offer for the exchangeables was conducted by Lamart Investment SA, an affiliate of Qualis.

Prior to the launch of the offers, Qualis, Lamart and their affiliates owned €12,428,135 of the senior notes, representing 15.67% of the outstanding amount, and €31,881,000, or 14.62%, of the exchangeables.

At the early deadline on Nov. 2, holders had tendered €61,892,393 of the notes and €181,632,000 of the exchangeables.

The companies offered €592.50 per €1,000 principal amount of regular notes and €50.00 per €1,000 principal amount of exchangeables.

The €592.50 price for the regular notes includes an early tender premium of €30.00 for each note tendered with consents by noon ET on Nov. 2, the early tender deadline.

As reported, Nov. 1 was an interest payment date for the regular notes, so holders who tendered will receive accrued interest from Nov. 1 up to but excluding the settlement date, which is anticipated for Nov. 21.

Holders of regular notes who also own exchangeables could only tender their regular notes if they also tendered all their exchangeables, and holders of exchangeables who also own regular notes could tender their exchangeables without tendering their regular notes.

Consent solicitation

Korreden solicited consents from the holders of the regular notes to some amendments to the indenture that would (a) eliminate or modify substantially all of the restrictive covenants relating to the company and its restricted subsidiaries, some reporting obligations and some events of default and related provisions and (b) release the collateral securing the notes and eliminate the covenants relating to security.

The company offered a consent fee of €0.01 per €1,000 principal amount of notes for which consents were delivered.

In order to remove the restrictive covenants, the company needed consents from the holders of at least 50.1% of the principal amount of outstanding notes. To release the collateral, it needed consents from the holders of at least 90% of the outstanding notes.

The tender offers were subject to the receipt of consents and tenders for at least 50.1% of the outstanding regular notes and the receipt of tenders for an amount of exchangeables that, together with the exchangeables that Lamart and its affiliates currently hold, represents at least 75% of the principal amount of outstanding exchangeables.

Under a lock-up agreement, holders who together hold or beneficially own 49.5% of the regular notes and 49.6% of the exchangeables previously agreed to deliver consents and tender their exchangeables.

However, one of the investors, who holds 4.5% of the regular notes and 4.5% of the exchangeables, already reserved the right not to deliver its consents or tender its exchangeables.

Rothschild & Cie assisted Qualis and Lamart with the communication of the offers to holders.

The consent solicitation agent and tender agent was Law Debenture Trust Co. of New York (212 750-6474, james.jones@lawdeb.com or gregg.weissman@lawdeb.com).

Korreden is a real estate holding company based in Paris. It started the offers on Oct. 20.

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