CPI collects consents to amend $215 million 8% senior notes due 2018

By Susanna Moon

Chicago, March 11 - CPI International, Inc. said it received the needed consents to amend its $215 million of outstanding 8% senior notes due 2018.

CPI solicited consents to lift the cap on permitted debt under its credit facilities to $365 million from $230 million and to modify the restricted payments covenant to allow CPI to pay a one-time dividend of up to $175 million to parent CPI International Holding Corp., as previously announced.

In exchange for these covenant changes, the company has agreed to the following:

• Cash payment of $25.00 per $1,000 principal amount;

• Interest rate increase on the notes to 8.75% from 8%; and

• Increase in the premium for any optional notes redemption to the make-whole premium for redemptions before Feb. 15, 2016; to 4% for redemptions from Feb. 15, 2016 to Feb. 14, 2017; and to 1% for redemptions after that.

That compares with the make-whole premium for redemptions before Feb. 15, 2015; 4% for redemptions from Feb. 15, 2015 to Feb. 14, 2016; 2% for redemptions from Feb. 15, 2016 to Feb. 14, 2017 and 0% for redemptions after that.

The consent solicitation ended at 5 p.m. ET on March 11. Holders needed to of record as of 5 p.m. ET on Jan. 31.

The company needed to obtain consents from holders of at least a majority of the outstanding notes in order to amend the notes.

The proposed amendments will become operative on the payment date, which is conditioned on closing new senior secured credit facilities comprising a revolving credit facility of at least $30 million and a term loan facility of at least $310 million.

Proceeds of the new credit facilities would be used to fund the special dividend and to refinance CPI's existing senior secured credit facilities.

UBS Investment Bank (888 719-4210 or 203 719-4210 collect) was the consent solicitation agent. Global Bondholder Services Corp. (866 470-3900 or 212 430-3774 for banks and brokerage firms) was the information agent and tabulation agent.

CPI International, based in Palo Alto, Calif., is the parent company of Communications & Power, a provider of microwave, radio frequency, power and control services.

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