Affinion completes exchange offer for 11 5/8% notes and 11½% notes

By Jennifer Chiou

New York, Dec. 12 - Affinion Group Holdings, Inc. announced the end of its exchange offer and consent solicitation for its $325 million of outstanding 11 5/8% senior notes due 2015 and Affinion Group, Inc.'s $355.5 million of outstanding 11½% senior subordinated notes due 2015.

Affinion Group, Inc. is a wholly owned subsidiary of Affinion Investments, LLC.

The offer ended at 5 p.m. ET on Dec. 9. It began on Nov. 7.

The companies solicited consents to amend the indenture to remove substantially all of the restrictive covenants and some default provisions.

The consent deadline was 5 p.m. ET on Nov. 21.

Affinion accepted tenders for $292.8 million principal amount, or 90.1%, of the 11 5/8% notes and $352.9 million principal amount, or 99.3%, of the 11½% notes.

As a result, Affinion Holdings issued $292.8 million aggregate principal amount of new 13¾%/14½% senior secured pay-in-kind toggle notes due 2018, series A warrants to purchase up to 13.5 million shares of Affinion Holdings' class B shares and series B warrants to purchase up to 70.2 million class B shares. Affinion Investments issued about $360 million principal amount of new 13½% senior subordinated notes due 2018 for validly tendered notes.

The company previously reduced the minimum tender condition to $292.5 million, or 90%, of the 11 5/8 notes. Prior to the change, the minimum tender condition was $300,625,000, or 92.5%, of the notes.

The minimum tender condition for the 11½% notes was $319.95 million, or 90% of the notes.

The companies previously said they obtained the needed consents to amend the notes, and Affinion Group obtained the consent of its lenders to an amendment to its senior secured credit facility, which was another condition to the offer. The supplemental indenture is now operative.

As previously announced, the total exchange value for each $1,000 principal amount of 11 5/8% notes tendered by the early tender deadline was $1,000 of Affinion Group's 13¾%/14½% senior secured pay-in-kind toggle notes due 2018, series A warrants for 46.1069 shares and series B warrants for 239.8612 shares.

For 11 5/8% notes tendered after the early deadline, the exchange value was $950 of toggle notes, series A warrants for 46.1069 shares and series B warrants for 239.8612 shares.

The total exchange value per $1,000 par amount of 11½% notes tendered by the early deadline was $1,020 of Affinion Investments' 13½% senior subordinated notes due 2018.

Holders who tendered their 11½% notes after the early deadline received $1,000 of new 13½% notes.

The companies also paid accrued interest to but excluding the settlement date.

On Nov. 7, some noteholders, including affiliates of Ares Management, LLC and investment funds affiliated with or managed by Angelo, Gordon & Co., which collectively held about $246 million, or 76%, principal amount of 11 5/8% notes and about $182 million, or 51%, principal amount of 11½% notes, agreed to tender their notes in the exchange offers.

Holders tendering their notes had to also deliver consents.

The proposed amendments required the consent of holders of at least a majority of the outstanding principal amount of each series of notes, not including those held by affiliates of Affinion, which was satisfied by the early tender deadline.

The companies said the purpose of the exchange offers and consent solicitations was to extend the maturities of the existing notes and to eliminate the requirement to pay cash interest.

The information and exchange agent was D.F. King & Co., Inc. (800 848-3416, 212 269-5550 for dealers and brokers or affinion@dfking.com).

Affinion is a Norwalk, Conn.-based provider of marketing services and loyalty programs.

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