National Waterworks amends tender for $200 million 10½% notes

New York, July 19 - National Waterworks, Inc. said it has amended its tender offer for any and all of its outstanding $200 million of 10½% series B senior subordinated notes due 2012 to reflect the announcement that the company will be acquired by Home Depot U.S.A., Inc.

The amount on offer will now be based on the yield of the 3% U.S. Treasury note due Nov. 15, 2007 plus 50 basis points. The total includes a consent payment of $30.00 per $1,000 principal amount which will be paid to holders who tendered by the consent deadline.

The consent deadline is pushed back to 5 p.m. ET on Aug. 3 from 5 p.m. ET on July 18 and the expiration date is now 5 p.m. ET on Aug. 17 instead of 5 p.m. ET on Aug. 1.

By the old consent deadline all the notes had been tendered.

Conditions to the offer were changed to exclude the financing condition and add a requirement that the acquisition by Home Depot be included.

The tender offer, announced on July 1, was previously linked to a planned initial public offering.

Under the original terms, the total consideration would have been calculated based on the product of 65% and the value of the 3% U.S. Treasury note due November 15, 2007 plus 50 basis points in addition to the product of 35% and 110.5% of the principal amount of the notes.

The latter is equal to the equity clawback price at which the company can redeem up to 35% of the notes with the proceeds of an equity offering or capital contribution.

National Waterworks continues to solicit consents to amend the note indentures to eliminate the restrictive covenants in the indenture governing the notes.

Valid tenders are considered consents to the proposed amendments.

J.P. Morgan Securities Inc. is the dealer manager and solicitation agent (call collect 212 834-3424 or 866 834-4666). Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 387-1500).

Waco, Texas-based National Waterworks distributes pipes, fittings, valves, meters, fire hydrants, service and repair products for water transport.

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