Sweetheart Cup plans exchange offer for 12% '03 notes

Sweetheart Cup Company Inc. said on Friday (Feb. 14) that it was planning to offer to exchange new 12% senior notes due 2004 for its outstanding 12% senior subordinated notes due 2003. It will also solicit consent of the 2003 noteholders to proposed changes in the notes' indenture that would eliminate most of the restrictive covenants.

Sweetheart - an Owens Mills, Md.-based maker of paper cups and other packaging products for the food-service industry - said in an S-4 registration statement filed with the Securities and Exchange Commission that it would issue up to $110 million of the new 2004 notes in exchange for all of the outstanding 2003 notes. The new notes will be guaranteed by the company's corporate parent, Sweetheart Holdings Inc, and would be exchange for the existing notes on a 1-for-1 basis.

Holders tendering notes under the exchange offer would also have to consent to the proposed indenture changes. Those holders validly tendering their notes (and thus, consenting to the indenture changes) before a consent deadline to be announced and not subsequently withdrawing them would be eligible to receive a consent payment equal to 1% of the principal amount of notes tendered. Holders who do not tender their notes by the consent deadline will not be eligible to receive the consent payment.

Sweetheart did not set an expiration deadline for the offer, and said the offer would commence as soon as is practicable after the registration becomes effective.

Holders tendering their notes before the consent deadline may withdraw their tendered notes and revoke their consents at any time prior to that deadline. Holders tendering after the consent deadline can withdraw their tendered notes and revoke consents at any time prior to the expiration date. Holders can revoke consents at any time prior to the execution of the supplemental indenture implementing the proposed amendments to the indenture governing the 2003 notes.

The company cautioned noteholders who do not tender their notes under the exchange offer that most of the restrictive covenants and the related events of default and certain other provisions in the indenture governing those notes will be removed or substantially modified.

Completion of the exchange offer is subject to the satisfaction of several conditions, including -but not limited to - Sweetheart receiving tenders from the holders of at least 90% of the principal amount of the existing notes, and the company obtaining an amendment to its senior credit facility.

Bear Sterns & Co. Inc. will be the dealer-manager for the exchange offer and consent solicitation.

Comdisco to make further optional partial redemption of 11% '05 notes

Comdisco Holding Company, Inc. said on Friday (Feb. 14) that it will make an optional partial redemption of $75 million principal amount of its 11% subordinated secured notes due 2005, bringing the outstanding principal amount of the notes after this redemption down to $160 million from $235 million currently.

The redemption is the latest in a string of such transactions which began last fall.

The notes will be redeemed on March 3 at a price equal to 100% of their principal amount plus accrued and unpaid interest to the redemption date. Wells Fargo Bank will serve as the paying agent for this redemption.

AS PREVIOUSLY ANNOUNCED, Rosemont, Ill.-based Comdisco, which formerly provided equipment leasing and technology services to business customers, emerged following its Chapter 11 bankruptcy reorganization as a holding company whose purpose is to sell, collect or otherwise reduce to money the remaining assets of the corporation.

It said on Oct. 9 that it would redeem the entire $400 million outstanding principal amount of its variable-rate senior secured notes due 2004 on or about Oct. 21, at par plus accrued and unpaid interest from Aug. 12 to the redemption date. Comdisco said that Wells Fargo Bank would serve as the paying agent for the planned note redemption.

On Oct. 23, Comdisco said that the redemption of all $400 million of the variable rate senior notes had taken place as scheduled on Oct. 21.

Comdisco also said that following the redemption of those notes, it would make cash interest payments on the 11% notes. It explained that terms of the 11% subordinated notes provided for the interest to be paid-in-kind through the issuance of additional 11% subordinated notes while the senior notes were outstanding. It said the initial interest payment date for the subordinated notes would be Dec. 31 and the cash interest payment would be made on that date to registered holders of record (as of the close of business on Dec. 15) of the 11% notes.

On Oct. 29, Comdisco said that it would make a partial redemption of $65 million of the outstanding principal amount of the 11% notes (out of the $650 million which were outstanding at that time), under its mandatory redemption obligations. Comdisco said the notes would be redeemed at par plus accrued and unpaid interest from Aug. 12 to the redemption date. It anticipated that the partial redemption of the notes would occur on Nov. 14, and that Wells Fargo Bank would serve as the paying agent for that redemption. On Nov. 15, Comdisco said that it had redeemed the $65 million of 11% notes on Nov. 14, as previously announced.

Comdisco said on Dec. 9 that it would make a redemption of another $200 million of the 11% notes (out of the then- current total outstanding amount of $585 million). It said that the notes would be redeemed at par plus accrued and unpaid interest from Aug. 12 to the redemption date. The company anticipated that the partial redemption of the notes would occur on Dec. 23, with Wells Fargo Bank serving as the paying agent for that redemption. On Dec. 23, Comdisco said that it had completed the transaction, which brought the remaining total outstanding amount down to $385 million. The notes were redeemed at par plus accrued and unpaid interest from Aug. 12 to the Dec. 23 redemption date.

Comdisco also announced that it would make optional further partial redemption of $100 million of the 11% notes, out of the then-currently outstanding $385 million. It said it would redeem the notes at par plus accrued and unpaid interest, up to the redemption date of Jan. 9. Comdisco said on Jan. 9 that it had completed the transaction, which brought the amount outstanding following the transaction down to $285 million). Wells Fargo Bank served as the paying agent for this redemption.

On Jan. 24, Comdisco said that it was planning to make a further optional partial redemption of $50 million of the 11% notes (out of the total then outstanding amount of $285 million, bringing the amount to be outstanding following the transaction down to $235 million). It said the notes would be redeemed on Feb. 10 at a price of par plus accrued and unpaid interest up to the redemption date. Comdisco said on Feb. 10 that it had completed the transaction.

Filtronic buys 10% notes at discount to par

Filtronic plc said on Friday (Feb. 14) that it had bought $9.1 million of its 10% senior notes due 2005 at a discount to par value.

Filtronic, a West Yorkshire, U.K.-based designer and manufacturer of customized microwave electronic subsystems, said that the notes which it bought will be cancelled, leaving $110.1 million of the notes outstanding.

Filtronic said that including the latest transaction, it has now bought in and cancelled a total of $59.9 million of the notes since Feb. 4, 2002.

Filtronic added that it is not using any of its £31 million bank overdraft facility for the note repurchases.

Aearo bought back 12½% notes

Aearo Corp. said Friday (Feb. 14) that its board of directors authorized management during the first quarter of fiscal 2002 to repurchase, "from time to time," a portion of the company's 12½% notes, subject to market conditions and other factors. The company said that it could give no assurances as to whether, or when, or at what price any such repurchases might occur.

Aearo, an Indianapolis-based maker of protective safety clothing such as hard hats, ear plugs and safety goggles, said in its 10-Q filing with the Securities and Exchange Commission that subsequently, pursuant to a first amendment to its senior bank facilities, the company purchased and retired $2 million of the notes during the first quarter of fiscal 2002.

Talk America buys back some 12% '07 notes, prepays 8% '06 notes

Talk America Holdings said on Friday (Feb. 14) that it has purchased $4 million principal amount of its 12% senior subordinated notes due 2007 on the open market and, in connection with that transaction, has prepaid $1.5 million of its 8% convertible notes due 2006.

Talk America, a Reston, Va.-based integrated communications provider, said it will record a non-cash gain of $1 million related to the purchase of the 12% notes. As a result of these transactions, totaling $5.5 million, the company's total debt has been reduced to $95.4 million.

UbiquiTel plans waives early tender deadline in 14% '10 notes exchange offer

UbiquiTel Operating Co. said Friday (Feb. 14) that it had modified the terms of its previously announced offer to exchange new debt for up to $225 million of its outstanding 14% senior subordinated discount notes due 2010.

The company said that it has waived the requirement that eligible holders had to have tendered their existing notes prior to 5 p.m. ET on Feb. 5 - the early tender date-in order to be eligible to receive a $50 cash payment for each $1,000 principal amount of the existing notes tendered and accepted, in addition to the new notes being offered in exchange for the existing notes.

As a result, the company will make the cash payment for all notes that are validly tendered by the offer expiration deadline (5 p.m. ET on Feb. 21) and accepted by the company. UbiquiTel intends to accept all notes validly tendered (subject to possible proration, as previously announced) and it intends to complete the offer promptly after the expiration date.

AS PREVIOUSLY ANNOUNCED: UbiquiTel - a wholly-owned subsidiary of UbiquiTel Inc., a Conshohocken, Pa.-based Sprint PCS affiliate - said on Jan. 23 that it planned to offer up to $56.25 million aggregate principal amount of new 14% senior discount notes due 2010 in exchange for up to $225 million of the outstanding 14% notes.

It said the exchange offer would expire at 5 p.m. ET on Feb. 21, subject to possible extension, with an initially announced early tender deadline of 5 p.m. ET on Feb. 5 (this was subsequently waived).

The company is offering to issue $250 in principal amount of the new notes per $1,000 principal amount of the existing notes validly tendered and accepted, up to a maximum of $225 million principal amount of the existing notes. It said that if more than $225 million of the existing notes were to be validly tendered prior to the expiration date, the company would accept tenders from its noteholders on a pro- rata basis.

In addition to offering the new notes for the existing securities, UbiqiTel initially offered to pay $50 in cash per $1,000 principal amount of existing notes validly tendered prior to early tender deadline and accepted for purchase by the company, but subsequently waived that condition, making all tendering noteholders eligible for the additional payment.

UbiquiTel said the offer is only being made inside the U.S. to investors who could be considered "qualified institutional buyers" or "accredited investors," or to "non-U.S. persons," as defined by the Securities Act of 1933. The new notes have not been registered under the Act for unrestricted public trading, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. The company said it will at some point in the future enter into a registration rights agreement under which it will agree to file an exchange offer registration statement with the Securities and Exchange Commission in order to exchange the new notes being issued in this transaction for registered notes having substantially identical terms.

The company said that the new notes to be issued in the offer will be senior unsecured obligations of the company, will be guaranteed on a senior unsecured basis by UbiquiTel Inc. and all of the company's existing and future restricted subsidiaries and will rank senior to the existing notes that will remain outstanding after consummation of the offer.

The offer is subject to the receipt of requisite consents from the lenders under the company's senior secured credit facility; completion of a new financing on terms acceptable to the company to fund the cash portion of the offer; and certain other general conditions.

UbiquiTel said that it had already reached an agreement in principle with its credit facility lenders for their consent to the offer. The lenders are conditioning their consent on the company being able to finance the entire cash portion of the offer through a new financing.

To that end, UbiquiTel also reached an agreement in principle with certain accredited investors (some of whom are directors of corporate parent UbiquiTel Inc.) for a new financing to raise the $11.25 million cash portion of the offer in a private placement; it anticipates that this will involve the issuance of approximately $15 million aggregate principal amount of the company's 14% senior discount notes due 2008, which will rank pari passu in right of payment to the New Notes being offered in the offer, and which will have customary covenants and terms. The company expects that warrants to purchase 11.25 million shares of UbiquiTel Inc.'s common stock will be issued to the investors in conjunction with the new financing. The closing of this private placement of notes and warrants will be contingent upon the consummation of the exchange offer, and the concurrence of The Nasdaq Stock Market, Inc. with respect to UbiquiTel Inc.'s interpretation of certain shareholder approval requirements in connection with warrants to be issued to participating directors.

In conjunction with having agreed to consent to the exchange offer, the credit facility lenders also have sought modifications to the credit facility, which the company expects to include a $15 million partial prepayment against the outstanding $245 million principal balance of term loans, a $5 million permanent reduction in the unused $55 million revolving line of credit and the company entering into a letter of intent to sell certain non-core tower assets.

UbiquiTel expects to use the anticipated combined proceeds of approximately $20 million from the tower assets sale and a previously reported income tax refund expected to be monetized in 2003 to offset the anticipated amount to be prepaid on the company's outstanding terms loans. However, there it said it could give no assurance that it will either complete the assets sale or receive the tax refund. The conditions under the pending senior secured credit facility amendment to prepay a portion of outstanding term loans and reduce the unused revolving line of credit will be contingent upon the consummation of the exchange offer.

Volume Services America plans tender for 11¼% '09 notes

Volume Services America Holdings Inc. said on Thursday (Feb. 13) that its Volume Services America, Inc. subsidiary expects to commence a tender offer and consent solicitation for all of its outstanding 11¼% senior subordinated notes due 2009. As of Oct. 1, 2002, there were $100 million of the notes outstanding.

The company also plans to solicit noteholder consents for proposed changes in the notes' indenture.

Volume Services America - a Spartanburg, S.C. -based provider of food and beverage concessions, high-end catering and merchandise services at sports facilities, convention centers and other entertainment venues, concurrently announced in connection with the planned tender that it filed a registration statement with the Securities and Exchange Commission for an initial public offering of Income Deposit SecuritieS representing shares of the company's common stock and subordinated notes. CIBC World Markets Corp. will serve as managing underwriter for the offering.

The IPO is conditioned on the successful closing of the tender offer and consent solicitation. The company will use a portion of the net proceeds from the equity offering and borrowings under its new credit facility to pay for the notes accepted for purchase in the tender offer and consent solicitation.

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