D.R. Horton sells new notes, proceeds to redeem 9% '08 notes

New York, June 18 - D.R. Horton, Inc. announced plans to sell $100 million of new senior notes and use the proceeds from the offering to call the approximately $100 million outstanding principal amount of its 9% senior notes due 2008.

Horton, an Arlington, Tex.-based homebuilder, said the notes would be sold in a registered offering under its effective shelf registration statement on file with the Securities and Exchange Commission.

Later in the session, high yield syndicate sources heard that Horton had sold $100 million of 5 7/8% senior notes due 2013 at par.

Baytex says 99.2% of 10½% '11 notes tendered in exchange offer

New York, June 18 - Baytex Energy Ltd. said that it was advised by the exchange agent for its previously announced offer to swap new debt for its outstanding 10½% senior subordinated notes due 2011 that holders of approximately $148.805 million of the notes (about 99.2% of the outstanding notes) had tendered their notes by the previously announced consent payment deadline of 5 p.m. ET on June 17.

All valid and unrevoked tenders of the existing notes made prior to the deadline have been accepted and have become irrevocable, with all withdrawal rights having terminated as of the deadline.

The company also said that the consent payment deadline has been waived, so that all existing notes validly tendered and accepted in the exchange offer will be entitled to a the consent payment as previously outlined.

As previously announced, Baytex, a Calgary, Alberta-based energy operator, said on June 3 that it had begun its exchange offer for the $150 million of 10½% notes.

It initially set an early tender deadline of 5 p.m. ET on June 17 (this was subsequently waived) and said the offer would expire at 5 p.m. ET on July 2.

Baytex said that it was offering $1,200 of new 9 5/8% senior subordinated notes due 2010 per $1,000 principal amount of the existing notes, with $20 of that consideration considered a consent payment (at first only holders tendering notes by the now-passed June 17 consent payment deadline were eligible; the deadline was subsequently waived, making all tendering noteholders eligible).

The company said the exchange would be subject to various conditions, including the now-fulfilled requirement that at least 75% of the outstanding principal amount of the existing notes be tendered.

Baytex further said that concurrently with the exchange, it would reorganize through a plan of arrangement, resulting in the formation of a new oil and gas trust and a new publicly traded exploration-focused company.

On completion of the arrangement, shareholders of Baytex will receive one unit of the trust and one-third of a common share of the new publicly traded exploration-focused company.

The new notes will contain covenants to facilitate the trust's proposed future distribution practices and the old notes will be amended as part of the exchange to permit the proposed reorganization.

The offering of the new notes in the exchange is being made only to qualified institutional buyers and non-U.S. persons located outside the U.S., as defined by Rule 144A and Regulation S of the Securities Act of 1933, as amended.

Advance Medical Optics plans Dutch auction tender for 9 ¼% '10 notes

New York, June 18 - Advanced Medical Optics, Inc. said that subject to market conditions and other factors, it plans to begin a "modified Dutch auction" tender offer for $75 million aggregate principal amount of its $200 million of outstanding 9¼% senior subordinated notes due 2010.

The Santa Ana, Calif.-based maker of ophthalmic surgical and eye care products said that the offer would expire at 12 midnight ET on July 16, subject to possible extension.

The company said it intends to offer to purchase the notes for cash at a purchase price of not greater than $1,097.50 nor less than $1,070 per $1,000 principal amount at maturity of notes tendered, plus accrued and unpaid interest up to but not including the date of purchase.

The final purchase price is to be determined via a "modified Dutch auction" procedure, under which Advanced Medical Optics would accept tenders in the order of lowest to highest tender prices specified or deemed to have been specified by tendering holders within the range. The company would select the single lowest price per $1,000 principal amount at maturity of notes so specified that would enable it to purchase an amount of notes either equal to the $75 million offer amount, OR, if less than the that offer amount of notes is tendered, all notes which have been tendered.

The company would pay the same purchase price for all notes tendered at or below the purchase price, subject to proration.

Should the amount of notes tendered under the offer at or below the purchase price exceed the offer amount, Advanced Medical Optics would first accept for purchase all such notes tendered at prices below the purchase price, and then it would accept for payment notes tendered at the purchase price on a pro rata basis from among such tendered notes.

The offer is expected to be conditioned on the closing of a private offering of convertible senior subordinated debt securities by Advanced Medical Optics, with the proceeds intended to fund consummation of the tender offer, as well as other conditions set forth in the official offer to purchase.

The company does not expect the tender offer to be conditioned on a minimum principal amount of notes being tendered in the offer.

Morgan Stanley & Co. Inc. will act as exclusive dealer manager (U.S. investors call 800 624-1808; international investors call 212 761-1893). Mellon Investor Services LLC (call 877 698-6865) will act as information agent and Bank of New York will act as depositary in connection with the offer.

Fairchild Semiconductor to call 10 3/8% '07 notes

New York, June 18 - Fairchild Semiconductor International, Inc. said that it intends to call $300 million in existing 10 3/8% senior subordinated notes due in 2007, using proceeds from a new $480 million senior credit facility that the company expects to close and fund by the end of this quarter.

The South Portland, Me.-based electronic components maker said that it expects to call the notes in July. The notes are currently callable at a premium of 5.19% over par (i.e. 105.19% of their principal amount).

Fairchild said it will see "the favorable impact of lower interest expense in the second half of the third quarter of 2003."

The company expects to record a third quarter charge of $22 million that consists of the call premium of $15.6 million, plus a write off of deferred financing costs associated with the original issuance of the notes and the existing revolving credit line.

The new $480 million senior credit facility which will be used to finance the note redemption includes a term B loan of $300 million and a $180 million revolving line of credit that will replace the company's existing $300 million revolving line of credit.

The new term B loan is expected to carry an interest cost of Libor plus 275 basis points. Fairchild said this compares favorably to the 10 3/8% interest expense of the notes. Should the Libor interest rate stay at current levels, the company expects to save approximately $18 million annually in pre-tax interest expenses.

MEPC expands Quips repurchase program

New York, June 18 - MEPC Ltd. said its board of directors have expanded and enlarged the repurchase program for its 9 1/8% cumulative guaranteed Quarterly Income Preferred Securities (Quips) series A,

The London company said it is now authorized to repurchase up to $40 million of the securities or approximately 19%, up from $25 million or 12% previously. The program runs for up to 12 months.

Since beginning the buybacks in June 2001, MEPC has bought back $22.2 million of the Quips.

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