Concentra completes redemption of 13% '09 notes

Concentra Operating Corp. (B3/B+) said on Wednesday (July 24) that it successfully completed the previously announced redemption of a portion of its 13% Series A and Series B senior subordinated notes. In connection with the redemption, Concentra paid a 13% premium over the face amount of the redeemed bonds.

AS PREVIOUSLY ANNOUNCED, Concentra Operating Corp. an Addison, Texas based provider of managed healthcare services (and the successor to and a wholly owned subsidiary of Concentra Inc.), said on June 26 that it would redeem $47.5 million of its outstanding 13% Series A and Series B senior subordinated notes due 2009 under the terms of their indentures, or 25% of the $190 million of currently outstanding notes, which were issued in 1999 in connection with Concentra's recapitalization. Concentra said it expected to complete the redemption on July 24. The company said that holders affected by the redemption would be notified by the notes' trustee, the Bank of New York, as to the amounts to be redeemed from them, in accordance with the indenture. Concentra said that to fund the redemption, its corporate parent, Concentra Inc., borrowed $55 million in a two year bridge loan facility provided by Salomon Smith Barney and Credit Suisse First Boston, and guaranteed by Concentra Inc.'s primary equity sponsor, Welsh Carson Anderson & Stowe. The proceeds of the loan have been contributed to Concentra as equity to fund the redemption and related transaction fees. Concentra said that it chose to undertake the bond redemption in advance of the Aug. 15 deadline set forth in the indenture for such a transaction. Concentra said that in addition to benefitting the company by lowering its level of debt, the bond redemption will also lower its interest expense and the consolidated interest expense of its parent corporation, Concentra Inc.

Acterna extends 9¾% '08 note tender offers

Acterna Corp. (Caa3/nr) said on Tuesday (July 23) that it had extended the expiration date of the previously announced cash tender offers for up to $155 million (on a combined basis) of its outstanding 9¾% percent senior subordinated notes due 2008. Those offers, which were to have expired at midnight ET on July 22, have been extended to expire at midnight, ET on Aug. 5, subject to possible further extension. As of the close of business on July 22, some $89.014 million principal amount of the notes had been validly tendered, representing an aggregate purchase price under the terms of the tender offer of approximately $19.6 million. Payment for notes which have been validly tendered and not validly withdrawn will be made promptly following the expiration of the offers.

AS PREVIOUSLY ANNOUNCED, Acterna, a Germantown, Md.-based communications test and management company, said on June 24 that along with its affiliate, it had begun cash tender offers for a total of up to $155 million of its outstanding 9¾% senior subordinated notes due 2008, which had been issued by its Acterna LLC subsidiary. The consideration for any notes tendered and accepted for payment under either of the tender offers will be $220 per $1,000 principal amount of notes tendered. Acterna said the tender offers are not conditioned on the tender of any minimum principal amount of notes being tendered by their holders. The tender offers are being made by Acterna's Acterna LLC subsidiary and by its CD&R VI (Barbados), Ltd. affiliate, and will expire at midnight ET on July 22, subject to possible extension. Payment for validly tendered notes not subsequently withdrawn will be made promptly following expiration of the offers. Acterna's own offer is for $109 million of the notes, while CD&R Barbados' offer is for $46 million of the notes, and is subject to a number of conditions set forth in the official Offers to Purchase, document, including the purchase by Acterna of the first $63 million of the notes which are tendered. Acterna's offer is subject to a number of conditions, including obtaining from its senior secured credit facility lenders consent to amend or waive certain provisions of that credit agreement. Acterna cautioned that it could offer no firm assurance that the consent sought by the company would be obtained on the terms sought on or before the expiration date of the tender offers, if at all. In connection with its offer, CD&R Barbados expects to agree with Acterna's senior secured credit agreement lenders to invest all cash interest received (on an after tax basis), on the notes it purchases in the tender offer or otherwise which it will otherwise hold in new Acterna senior secured convertible notes. Acterna said on July 15 that its senior secured credit facility lender group will permit the company to use $24 million to purchase a portion of the 9¾% notes. Acterna further announced that it had reached agreement with the lender group on an amendment to its credit agreement, with the lenders, among other things, to approve the sale of Acterna's Airshow business to Rockwell Collins and to consent to a change to certain financial covenants in the credit agreement upon consummation of the Airshow sale. Aceterna said the amendment clears the way for the company to proceed with the tender offer for the bonds, and said the revised financial covenants would provide additional financial flexibility as the company works through "difficult industry conditions."

Dresdner Kleinwort Wasserstein, Inc. (call Marc D. Puntus at 212 895 1819) is acting as the exclusive Dealer Manager. MacKenzie Partners, Inc. (call 800 322 2885) is the information agent.

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