Mrs. Fields extends tender and exchange offers for 10 1/8% notes

New York, March 11 - Mrs. Fields Famous Brands LLC (B3/CCC+) said it again extended its previously announced tender offer for all of the $140 million of outstanding 10 1/8% senior notes maturing Dec. 1 (Caa3/CCC) issued by its corporate parent, Mrs. Fields Original Cookies Inc., as well as the alternative offer to allow certain holders to exchange their existing notes for new debt.

Those offers, which had been scheduled to expire at 11 a.m. ET on March 15, have now been extended to 11 a.m. ET on March 16, the anticipated closing time of the company's Rule 144A sale of new junk bonds, subject to possible further extension. Mrs. Fields concurrently announced that it had priced $115 million principal amount of new 11½% senior secured notes due 2011 in a Rule 144A offering on March 9.

As of 5 p.m. ET on March 10, noteholders had tendered $80.727 million principal amount of the existing notes under the exchange offer, down from the $84.227 million tendered as of 5 p.m. ET on March 8 (and announced on March 9, when the company last extended its offers), and they had $31.931 million principal amount of the notes under the tender offer, up from the $26.656 that had been tendered by March 8.

Together, some 80.5% of the outstanding notes had been tendered under either the exchange offer or the tender offer by March 10, up from 79.2% as of March 8. Holders of the 10 1/8% notes who have already tendered them under either offer or who subsequently tender them prior to the expiration of the tender and exchange offers will be unable, under the terms of the offers, to later withdraw their tenders.

As previously announced, Mrs. Fields Famous Brands, a subsidiary of Mrs. Fields' Original Cookies, a Salt Lake City-based franchisor in the premium snack-food industry, said on Feb. 6 that it had begun a tender offer for all of the $140 million of outstanding 10 1/8% senior notes scheduled to come due on Dec. 1 by Mrs. Fields Original Cookies Inc. It also said that it was concurrently offering certain of its noteholders the option of exchanging their outstanding notes for new debt that it planned to issue.

Mrs. Fields originally said the tender and exchange offers would expire at midnight ET on March 5 (as noted, the deadline was subsequently extended several times).

In the tender offer, the company said it would purchase the 10 1/8% notes at a cash price of $850 per $1,000 principal amount of notes tendered.

In the exchange offer, the company said that holders of notes falling into the category of "qualified institutional buyers" and "institutional investors," as defined by the Securities Act of 1933, could elect, instead, to exchange their notes, on an even-up, 1-for-1 basis, for new 9% senior secured notes due 2011 that the company said it was planning to issue.

Whether tendering for exchange or for purchase, holders also would receive a cash payment equal to all accrued and unpaid interest on the existing notes.

Mrs. Fields said it was also soliciting the consent of the 10 1/8% noteholders for proposed changes in the note's indenture. Holders validly tendering notes either for purchase in cash or for exchange would be considered to have consented to the proposed amendments.

The company said the tender and exchange offers would be subject to various conditions, originally including the tender for purchase or exchange of at least 95% of the existing notes (this percentage was subsequently reduced to 86%). Other conditions included execution of a supplemental indenture incorporating the proposed indenture amendments; and the completion of Mrs. Field's planned private placement sale of new senior secured notes, which the company announced in tandem with the tender and exchange offers (the company announced plans to sell up $121.7 million face amount of new 11% senior secured notes due 2011 in a Rule 144A transaction, and said that it would issue new 9% senior secured notes due 2011 in the same principal amount as the principal amount of notes tendered for exchange in the aforementioned exchange offer; those 9% notes would have the same terms as the notes to be sold under the Rule 144A deal, but would have a lower coupon interest rate, as noted, and lower optional redemption premiums.

On March 9, it priced a $115 million Rule 144A offering of new 11½% senior secured notes due 2011 at par). Completion of the sale of the 144A notes would meanwhile be conditioned upon the consummation of the tender and exchange offers.

Mrs. Fields announced on March 9 that it had amended the terms of the offer. In addition to reducing the minimum condition percentage to 86% from the original 95%, as noted, the company also amended the definition of the "supplemental indenture condition," so that a supplemental indenture could be executed by Mrs. Fields and the notes' trustee at any time after 4 p.m. ET on March 9, so long as the company had received valid and unrevoked consents from the holders of at least a majority in principal amount of the notes, whether or not the minimum condition, as amended, had then been satisfied. And it extended withdrawal rights relating to the notes previously tendered, so that they could be withdrawn up until the later of either 4 p.m. ET on March 9 or such time as the supplemental indenture was executed.

Mrs. Fields said that assuming the company were to accept for purchase or exchange all of the notes tendered for either purchase or for exchange under its tender offer and exchange offer, it currently plans to redeem any other existing notes not tendered by their holders or not accepted for payment or exchange. Such a redemption would take place shortly after the expiration of the tender offer and the exchange offer, at a redemption price equal to the principal amount of the untendered existing notes, plus accrued and unpaid interest up to, but not including, the redemption date.

Jefferies & Co. Inc. is the exclusive dealer manager and solicitation agent for the tender offer (call 310 575-5232). The Bank of New York is the tender and exchange agent (call 212 815-3738).

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