Station Casinos to redeem 9¾% '07 notes

Station Casinos Inc. (B1/BB-) said on Wednesday (Sept. 18) that it had notified its noteholders of its plans to redeem its $150 million of 9¾% senior subordinated notes due 2007 (B2/B+). The notes will be redeemed on Oct. 18.

Station Casinos, a Las Vegas-based gaming concern catering primarily to the local market, said it will fund the redemption with its revolving credit facility. In addition, the company cancelled its interest rate swap with a notional amount of $150 million, which was matched against the senior subordinated notes. Station said that the net effect of these transactions will reduce its annual interest expense by approximately $2 million (2 cents per share).

ISG extends tender for 10% '08 notes again

ISG Resources, Inc (Caa1/CCC) said on Wednesday (Sept. 18) that it had extended its previously announced tender offer and related consent solicitation for its outstanding 10% senior subordinated notes due 2008. The tender offer was extended to midnight ET on Sept. 18, subject to possible further extension, from the previous Sept. 17 deadline. The tender offer and a supplemental indenture amending the notes remain conditional on the completion of the previously announced merger of Industrial Services Group, Inc., the parent company of ISG Resources, with and into a wholly owned subsidiary of Headwaters Inc.

AS PREVIOUSLY ANNOUNCED: ISG Resources, Inc. said on Sept. 9 that it had extended its previously announced tender offer and related consent solicitation for its outstanding 10% senior subordinated notes due 2008. The tender offer was extended to 12 midnight ET on Friday (Sept. 13), subject to possible further extension, from the previous Sept. 6 deadline. Having already received sufficient tenders and consents from its noteholders to amend the notes' indenture, as previously announced, ISG on Wednesday (Aug. 21) entered into a supplemental indenture incorporating the proposed amendments, which will become effective when ISG accepts the tendered notes for payment.

ISG Resources, a Salt Lake City, Utah-based provider of coal combustion products management and marketing services to the electric power industry, said on July 25 that it had begun a cash tender offer for its $100 million of outstanding 10% notes, as well as a related consent solicitation. It said the tender offer would expire at midnight ET on Aug. 21, while the consent solicitation would expire at 5 p.m. ET on Aug. 7, with both deadlines subject to possible extension. The total consideration to be paid for each validly tendered note (which includes a $10 per $1,000 principal amount of notes tendered consent payment, where applicable), will be equal to 101% of par (i.e., $1,010 per $1,000 principal amount), plus accrued and unpaid interest on the notes up to, but not including, the date of payment.

Only those holders tendering their notes prior to the consent deadline (thus granting their consent to the proposed indenture changes) would be eligible to receive the consent payment. The indenture amendments would, among other things, eliminate substantially all of the indenture's restrictive covenants and would amend other provisions contained in the Indenture. ISG said that adoption of the amendments would require the consent of the holders of at least a majority of the principal amount of the outstanding notes. Holders tendering their notes would be required to consent to the proposed amendments and holders could not deliver consents to the proposed amendments without tendering their notes in the tender offer. Holders tendering their notes after the consent deadline, though before the expiration deadline, will receive the total consideration less the $10 per $1,000 principal amount consent payment.

ISG said that its corporate parent, Industrial Services Group, Inc, announced on July 15 that it had executed a definitive merger agreement, under which it would be acquired by Headwaters Inc., a developer of alternative fuel and energy related technologies, by means of a merger. ISG said the acquisition is subject to the receipt of required regulatory approvals and other customary conditions. The parties expect the acquisition to be completed on or about Aug. 22 (that completion deadline was subsequently extended). The tender offer for the notes is conditioned upon, among other things, the now-fulfilled requirement of receipt of the consents to the indenture amendments, as well as the completion by Headwaters of its acquisition of Industrial Services Group. ISG further said that under terms of noteholder agreements between ISG Resources and certain institutional holders of the notes, the holders of approximately 61.7% of the outstanding principal amount of the notes agreed to tender their notes under the tender offer and deliver their consents to the proposed amendments prior to the consent deadline, subject to the satisfaction of all the conditions to those noteholder agreements. ISG said it therefore expected to receive the requisite consents prior to the consent date. Notes tendered and consents delivered before the consent deadline may not be withdrawn or revoked, respectively, after the consent deadline.

On Aug. 8, ISG said that it had received sufficient tenders and consents to amend the 10% notes' indenture by the consent solicitation deadline of 5 p.m. ET on Aug. 7, when the solicitation expired as scheduled without extension. As of that deadline, holders of approximately 99% of the outstanding notes had tendered their notes and had consented to the proposed indenture changes. ISG said it planned to execute a supplemental indenture incorporating the newly approved amendments, but added that the amendments would not become effective unless and until the notes were accepted for payment by the company under terms of the tender offer and consent solicitation. ISG cautioned that once the amendments become effective, even holders of notes not tendered in the offer would be bound by them. On Aug. 22, ISG said that it had extended the tender offer and related consent solicitation to 12 midnight ET on Sept. 6, subject to possible further extension, from the original Aug. 21 deadline. ISG said that it had entered into a supplemental indenture on Aug. 21 incorporating the proposed amendments, which are to become effective when ISG accepts the tendered notes for payment. There was no subsequent public announcement until Sept. 16, when the company again announced that it had extended the deadline on the offer to midnight ET on Sept. 17, subject to possible further extension, from the previous Sept. 13 deadline.

Morgan Stanley & Co. Inc. (call 800 223-2440 ext. 2492) is acting as the dealer manager for the tender offer and the solicitation agent for the consent solicitation, while D. F. King & Co., Inc. (call 800 848-3402) is the information agent. The depositary for the tender offer is U.S. Bank NA.

Resource America tenders for 12% '04 notes

Resource America Inc. (B) said on Monday (Sept. 16) that it had begun a tender offer for all of its $65. 636 million of outstanding 12% senior notes due 2004, as well as a related solicitation of noteholder consents aimed at enacting certain changes to the covenants contained in the notes' indenture. Holders may not tender their notes without delivering consents and may not deliver consents without tendering their notes.

The Philadelphia-based proprietary asset management company set 5 p.m. ET on Sept. 25 as the consent deadline and set 5 p.m. ET on Oct. 11 as the tender offer deadline, both dates subject to possible extension. Noteholders who validly tender and deliver consents by the consent date will receive total consideration of $1,060.63 per $1,000 principal amount of such notes, including a consent payment of $30.00 per $1,000 principal amount. Holders who validly tender their notes after the consent date will only receive the purchase price, which is equivalent to the total consideration minus the consent payment. Accrued and unpaid interest will be paid on all validly tendered notes which are accepted for payment.

Resource America currently plans to call for the redemption of any notes not tendered in the tender offer at a redemption price of $1,060.00 per $1,000 principal amount of such notes, although the press release issued by the company does not constitute a call for redemption, which may be made at a later date in accordance with the indenture. It intends to fund the tender offer with the net proceeds from its planned issuance of $125 million of new senior notes due 2010.

Bear, Stearns & Co., Inc. (contact the Global Liability Management Group at 877 696-2327) and Friedman, Billings, Ramsey & Co., Inc. (call 800 846-5050) will act as the exclusive dealer managers and solicitation agents in connection with the tender offer and consent solicitation. D.F. King & Co., Inc. (call 800 488-8075) is the information agent.

Eagle Foods repurchased some notes in first half

Eagle Food Centers Inc. said in a Securities and Exchange Commission filing on Tuesday (Sept. 17) that it repurchased $1.6 million of its senior notes during the first half of fiscal 2002 at a cost of $802,000, recording a gain on extinguishment of debt of $789,000. The company said that payments related to lease rejection costs were $325,000 during the first two quarters of fiscal 2002, and that the repurchase of the senior notes and the lease rejection payments were primarily funded from cash on hand, cash flows from operations and loans against Eagle's revolving credit agreement.

Eagle, a Milan, Ill.- based supermarket operator, said that in the previous quarter, it had repurchased $1 million of its senior notes at a cost of $563,000, recording an extraordinary gain of $478,000. Payments related to lease rejection costs during the quarter were $302,000. The repurchase of the senior notes and the lease rejection payments were primarily funded from loans against the credit revolver.

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