Service Corp. extends tender offer for 7.7% notes

By Laura Lutz

Des Moines, Oct. 5 - Service Corp. International pushed back the deadline of its tender offer and consent solicitation for some of its 7.70% notes due April 15 to 8 a.m. ET on Oct. 13 from 11:59 p.m. ET on Oct. 5.

The offer is being extended to coordinate with the closing of the acquisition of Alderwoods Group, Inc.

On Sept. 20, the company announced that it would pay $1,058.11 plus accrued interest for each $1,000 principal amount of notes.

The payout includes a $20.00 consent payment for notes tendered by the consent deadline.

As previously reported, Service Corp. had received tenders for $138.932 million or 96.17% of the notes by the Sept. 20 consent deadline. The response is sufficient to allow for amendment of the note indenture.

Pricing is based on the present value of the principal and interest payments through maturity, discounted using a spread of 50 basis points over the 3 1/8% U.S. Treasury note due April 15, 2009, for a tender offer yield of 5.213%. Accrued interest up to but not including the payment date will be excluded.

The notes affected are the $144.465 million with Cusip numbers 817565AX2, 817565AV6 and 817565AW4.

The company's other 7.70% notes due 2009 are not covered by the tender offer.

The Houston-based company is soliciting consents to amend the note indenture to eliminate substantially all of the restrictive covenants as well as certain events of default.

To make the changes, it needed approval from holders of a majority of the notes.

Holders who tender must consent to the amendments.

Service Corp. will also pay accrued interest up to but excluding the payment date.

The tender is subject to a majority of the notes being tendered by the consent deadline, completion of the acquisition of Alderwoods Group, Inc. by Service Corp., the receipt of sufficient financing to fund the tender and other refinancing transactions and execution of the supplementary indenture.

J.P. Morgan Securities Inc. is dealer manager and solicitation agent (call collect 212 270-3994). Global Bondholder Services Corp. is the information agent (866 470-3900, banks and brokerages call 212 430-3774).

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