FRIENDLY ICE CREAM CORP. (FRN) (B3/CCC+) announced Monday (Dec. 3) that it has amended the terms of its previously announced "modified Dutch auction" tender offer for some of its outstanding 10½% senior notes due 2007 and had extended the expiration of the offer to 11:59 p.m. ET on Dec. 14 from the previous deadline of Nov. 30. The new deadline is subject to possible further extension. The company made its announcement after it was unable to obtain sufficient new financing, under its previously announced refinancing plan, and the pending tender offer was undersubscribed. As of 5 p.m. ET on Nov. 30, just $3.242 million principal amount of the notes had been tendered. Friendly said that it is continuing its refinancing efforts, but now no longer expects to be able to obtain a new $35 million working capital facility. It will try to obtain a revolving credit facility of less than $35 million, but can give no assurances that it will able to do so. Regarding the tender offer, Friendly said it had reduced the total amount of funds it will spend to purchase the notes to $17 million from $21 million. It also increased the offer prices for the notes to a new range of $750 to $800 per $1,000 principal amount, from the previous $720-$750 range. Accordingly, the revised face amount of the notes which the company will purchase will now be between $21.3 million and $22.6 million. All notes already tendered will be considered to have been tendered at a price of $750 per $1,000 principal amount, the new minimum price, even if they were in fact tendered for a lower price. AS PREVIOUSLY ANNOUNCED: Friendly's said on Oct. 24 that it has begun a "modified dutch auction" tender offer for a portion of its outstanding 10½% senior notes due 2007. The Wilbraham, Mass.-based restaurant/ice cream shop operator and ice cream maker asked noteholders to submit offers to sell their notes, at a price determined by each holder, within a range of $720 to $750 per $1,000 principal amount (subsequently raised). Holders whose notes are accepted for purchase will also receive accrued and unpaid interest. Friendly's originally said it planed to spend a maximum of $21 million on the buyback, excluding interest costs (since reduced). Based on that total and on the stated price range, it said it envisioned buying back somewhere between $28 million and $29.166 million of the notes under the tender offer (since reduced), which was originally slated to expire at 11:59 p.m. ET on Nov. 20 (since extended). Notes may be tendered or withdrawn at any time prior to the deadline. The company said that under the "modified Dutch auction" process, it would first accept notes offered for sale at the minimum price (originally $720 per $1,000 principal amount price, since raised to $750) and will then accept offers to sell notes in order of increasing offer price, until it has spent approximately its total allotted (first $21 million, now $17 million), excluding accrued interest. Friendly's will pay to all holders whose offers are accepted the accepted for purchase, even if that price is higher than the price offered by a holder. If the total principal amount of notes offered at this "clearing price" exceeds the maximum amount of notes the company will accept under its tender offer, notes will be accepted on a pro-rata basis. Friendly's said it was making the tender offer in connection with a three-part refinancing plan, involving a new revolving credit facility, new mortgage loans and a sale and leaseback transaction. It said the proceeds of these financings would be used to finance the offer, as well as to repay Friendly's existing credit facility, and for working letter relating to the mortgage financing, but does not have any commitments relating to the new credit facility or the sale and leaseback transaction. Availability of funds from the successful closing of the refinancing plan is a condition to Friendly's obligation to purchase the notes under its tender offer, and Friendly's cautioned that it could not give absolute assurances that it will be able to consummate the refinancing plan. Banc of America Securities LLC is the exclusive dealer manager, The Bank of New York is the depositary, and D.F. King & Co., Inc. is the information agent.

COINSTAR INC. (CSTR) said Monday (Dec. 3) that it had instructed the Bank of New York on Nov. 30 to call $10 million principle amount on its 13% senior subordinated discount notes, on Dec. 31. As of October 1, the notes were callable at 108% of principal. The Bellevue, Wash.-based owner/operator of supermarket coin-counting machines believes the transaction will result in net interest expense savings of approximately $1 million annually, beginning in 2002.

KB HOME (KBH) said Friday (Nov. 30) that it will redeem all of its $175 million of outstanding 9 3/8% senior subordinated notes due 2003. The Los Angeles-based homebuilder said the notes will be redeemed at par, plus accrued and unpaid interest up to the date of redemption, on Dec. 31. The paying agent for the notes is State Street Bank and Trust Co. of California, NA. All registered holders of the Notes will receive a notice of redemption that includes details on submitting the Notes for payment. Earlier that day, KBH sold a $200 million issue of new 8 5/8% senior subordinated notes. There was no official word that the proceeds of the note offering would be used to fund the redemption of the 9 3/8% debt, although such a use is a possibility.

AVIATION SALES CO. (AVS) said Friday (Nov. 30) that its bank lenders recently approved a debt restructuring plan under which the holders of its $165 million of outstanding 8 1/8% senior subordinated notes due 2008 will exchange their notes for $10 million in cash, $100 million in new 8% five-year payment-in-kind notes and 15% of the equity in the reorganized company. Holders of 73.02% of the outstanding notes agreed in August to support the plan, and also agreed to waive the default arising because Aviation Sales, a Greensboro, N.C.-based provider of aviation maintenance, repair and overhaul services for major commercial airlines, did not pay the interest due on the notes on Aug. 15. Aviation Sales said that to achieve the note restructuring and accompanying equity rights offering, it must achieve approval of a majority of its current stockholders and 80% of the holders of the existing notes must tender their securities and consent to remove all covenants, except the obligation to pay principal and interest. The company said that if it does not complete the note exchange and rights offering, it may have to seek bankruptcy protection. It gave no projected timetable for its planned note exchange offer and consent solicitation.

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