Smurfit-Stone Container tenders for 9¾% '03 notes

Smurfit-Stone Container Corp. said on Tuesday (Aug. 27) that its Jefferson Smurfit Corp. (U.S.) indirect, wholly-owned subsidiary was beginning a tender offer for its $500 million of outstanding 9¾% senior notes due 2003, as well as a related solicitation of noteholder consents to proposed indenture changes, which would eliminate substantially all restrictive covenants and certain event of default provisions. The tender offer is being undertaken as part of a previously announced larger series of transactions which will see Smurfit-Stone Container Corp.'s parent company, Irish-based paper packaging maker Jefferson Smurfit Group plc, sold to U.S. equity investment firm Madison Dearborn Partners Inc. for $3.6 billion. As part of that transaction, Jefferson Smurfit will spin off its 29.3% stake in Smurfit-Stone Container, a Chicago based maker of paper packaging formerly known as Stone Container Corp. before its acquisition several years ago by Jefferson Smurfit.

The company set a consent deadline of 5 p.m. ET on Sept. 6, and the tender offer will expire at 5 p.m. ET on Sept. 24, with both deadlines subject to possible extension. Smurfit-Stone will set the consideration it will pay for the notes based on a 75 basis-point fixed spread over the yield of the reference security, the 5½% U.S. Treasury Note due March 31, 2003. The total consideration payable to those holders who tender their notes by the consent deadline will include a $30 per $1,000 principal amount consent fee (which will not be payable to holders tendering their notes after the consent deadline). All noteholders will also receive accrued interest on their notes up to the settlement date. The tender offer will be conditioned upon - among other things-the satisfaction of a requisite consents condition and a financing condition, each of which is described in more detail in the official Offer to Purchase and Consent Solicitation Statement.

Morgan Stanley (call 877 445-0397 or 800 223-2440, ext. 2492) is the dealer-manager for the tender offer. D.F. King &Co., Inc. (bankers and brokers call collect 212 269-5550, others call toll-free 800 714-3312) is the information agent; international inquiries should be directed to D.F. King (Europe) Ltd. at (44 207) 920-9700.

ShoLodge to swap new debt for 9¾% '06 and 9.55% '07 notes

ShoLodge Inc. (Caa3/CCC) on Tuesday (Aug. 27) announced the filing of a registration statement with the Securities and Exchange Commission in connection with a pair of expected exchange offers and consent solicitations relating to its outstanding senior subordinated notes.

The Hendersonville, Tenn.-based hotel chain said in an S-4 filing with the SEC that the twin offers would involve the exchange of new 10.15% Series A-1 senior subordinated notes due 2006 for its outstanding 9¾% Series A senior subordinated notes due 2006, and new 9.95% Series B-1 senior subordinated notes due 2007 for its outstanding 9.55% Series B senior subordinated notes due 2007. The company envisions a 1-for-1 swap of new notes for an equivalent par amount of the existing notes. The exchange offers would be expected to begin as soon as practicable after the effective date of the registration statement. No expiration deadlines have been set.

The new notes would have an increased interest rate of 40 basis points in exchange for consents to amend the indenture to relax certain financial covenants and eliminate certain "put" rights currently available to noteholders. ShoLodge said that the maximum number of new 10.15% and 9.95% notes to be issued by the company in exchange for the 9.75% and 9.55% notes has not yet been determined. The exchange offer is for an aggregate of 51% of the 9.75% and 9.55% notes, taken as a single class. The offer is conditioned in part upon the receipt of valid and unrevoked consents to the proposed indenture amendments by the deadline - when it is set - from the holders of at least 51% of the total outstanding amount of both of the two series of existing notes, voting as a single class. A holder validly tendering notes for exchange will be considered to be consenting to the proposed indenture amendments. Tenders of old notes may be withdrawn at any time prior to the expiration of the applicable exchange offer.

Upon the receipt of the required consents, ShoLodge and the indenture trustee intend to execute a supplemental indenture incorporating the proposed indenture changes. Those amendments will not become operative with respect to a series of existing notes until ShoLodge has accepted the tenders of the existing notes of that series and has exchanged the new notes for them. ShoLodge will only be required to accept that number of tendered existing notes of each series that will represent the minimum number of consents necessary to amend the indenture. Tendered existing notes will be accepted promptly after the expiration of the exchange offers on a first-come, first-served basis. Existing notes not exchanged under the offer and remaining outstanding will be bound by the supplemental indenture containing the indenture changes.

First Tennessee Securities Corp. in Nashville, Tenn. (call 888 382-7766) will act as the dealer-manager for the exchange offers. Deutsche Bank Trust Co. Americas (call 800 735-7777) will be the exchange agent.

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