Matria obtains waiver in tender for 11% notes

New York, April 12 - Matria Healthcare Inc. said it obtained waivers from holders of $69.755 million principal amount of its 11% series B senior notes due 2008, a majority of the outstanding amount.

The waiver applies to the covenant limiting the incurrence of additional debt. As a result, Matria can now incur up to $150 million of additional debt to buy notes in the tender offer.

Matria announced on March 30 that it had begun a tender offer for all of its $122 million of outstanding 11% series B notes and had started soliciting consents to proposed changes in the notes' indenture aimed at eliminating all of the restrictive covenants and certain events of default and other related provisions.

The company set a consent deadline of at 9 a.m. ET on April 13, and the tender offer will expire at noon ET on April 27, subject to possible extension.

Matria, a Marietta, Ga.-based provider of comprehensive disease management programs to health plans and employers, has not yet set the price it will offer to noteholders. It plans to set the price no later than the start of business on the second business day before the tender offer expires (a tentative pricing date of April 23).

Those who validly tender their notes and deliver consents before the consent deadline will receive the total consideration, which will be determined based upon a fixed spread of 0.50% over the yield to maturity on the reference security, the 1.625% U.S. Treasury note due April 30, 2005. Total consideration also includes a $20 per $1,000 principal amount consent fee. Holders who tender their notes and deliver their consents after the consent deadline but before the expiration will not receive the consent fee.

Holders who tender their notes will be required to consent to the proposed amendments. The consent of holders of a majority of the outstanding principal amount of notes is required for the proposed amendments to become effective, but the proposed amendments will not become operative unless a financing condition to which the offer is subject is satisfied (the company is seeking to replace its existing credit facility with a new credit facility and/or obtain other financing through the sale of publicly or privately held securities on acceptable terms and in an overall sufficient amount to let Matria purchase all of the outstanding notes).

Should the amount of notes tendered exceed the amount of proceeds raised by the company in a financing permitted by the waiver, Matria will be required to use those proceeds to purchase the tendered notes on a pro rata basis.

The completion of the tender offer and the consent solicitation is subject to several conditions, including the financing condition; should the waiver Matria is seeking, allowing it to incur new debt to fund the tender offer, become effective and should Matria complete such a funding, it will still be obligated to use the proceeds from that financing to purchase any notes tendered, whether or not the other conditions applicable to the tender offer are satisfied.

By purchasing the notes through the tender offer, Matria anticipates saving the annual interest expense related to the senior notes of some $12.8 million.

UBS Investment Bank is acting as the exclusive dealer manager for the offer and the solicitation agent for the consent solicitation (contact Kevin Reynolds at 888 722-9555 or 203 719-4210). UBS is also advising Matria on various financing alternatives to complete the tender offer. MacKenzie Partners Inc. is the information agent (call 800 322-2885).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.