Fairchild tenders for 10 ¾% '09 notes

The Fairchild Corp. said on Tuesday (Oct. 22) that it was beginning a cash tender offer for any and all of its outstanding 10¾% senior subordinated notes due 2009, as well as a related solicitation of noteholder consents to amending the notes' indenture to eliminate substantially all restrictive covenants and certain events of default.

Fairchild, a Dulles, Va.-based manufacturer and supplier of precision fastening systems used in aircraft and a distributor of aerospace parts, said that the tender offer is scheduled to expire at 12:01 ET on Nov. 20, and the consent deadline will be 5 p.m. ET on Nov. 4, with both deadlines subject to possible extension.

Fairchild said it would purchase the notes at par value, (i.e. $1,000 per $1,000 principal amount of notes tendered) plus accrued and unpaid interest up to the payment date. The par purchase price includes a consent payment of $10 per $1,000 principal amount for all notes tendered by the consent deadline. Holders who tender notes after the consent date will not be paid the consent payment as part of their consideration.

The company said that if the notes are accepted for purchase, payment for tendered notes and consents would occur promptly after the expiration of the offer and concurrently with the closing of the sale by Fairchild of its fastener business to Alcoa Inc. Consummation of the tender offer, and payment for tendered notes, is subject to the satisfaction or waiver of various conditions, including the condition that there be validly tendered and not validly withdrawn at least a majority of the outstanding principal amount of notes, as well as the condition that the sale by Fairchild of its fastener business to Alcoa be consummated.

Banc of America Securities LLC (call 888 292-0070) is the dealer manager and solicitation agent for the tender offer and the consent solicitation. The information agent is D.F. King & Co., Inc. (call 800 207-3158).

Shoney's tenders for '04 LYON notes

Shoney's, Inc. said on Monday (Oct. 21) that it has begun a tender offer for all of its outstanding zero-coupon subordinated Liquid Yield Option Notes due 2004.

The Nashville, Tenn.-based restaurant chain operator said that holders tendering notes on or before 5 p.m. ET on Nov. 15 would receive $840 per $1,000 principal amount of the notes.

D.F. King & Co., Inc. (call 800 290-6431) is the information agent for the tender offer.

Fleming begins exchange offer for 9 7/8% '12 notes

Fleming Companies, Inc. said on Friday (Oct. 18) that it had begun its previously announced registered offer to exchange new 9 7/8% senior subordinated notes due 2012, which have been registered for public trading, for its outstanding 9 7/8% senior subordinated notes due 2012, which were not registered.

The exchange offer prospectus and related letter of transmittal. The exchange offer will expire at 5 p.m. ET on Nov. 18, subject to possible further extension. Notes tendered under the exchange offer may be withdrawn at any time prior to the expiration date.

Any of the existing notes not tendered for exchange in the exchange offer will remain outstanding and will continue to accrue interest, but will not retain any rights under the registration rights agreement, except in limited circumstances.

Manufacturers and Traders Trust Co. (call 716 842-5602) is the exchange agent.

AS PREVIOUSLY ANNOUNCED, Fleming, a Dallas-based wholesale grocery products distributor, announced on Oct. 16 that the company's Form S-4 registration statement - relating to its proposed offer of up to $260 million of the new 9 7/8% notes for a like amount of the existing notes - had been declared effective by the Securities and Exchange Commission. Fleming said the new notes will have substantially identical terms as the old notes, except that they have been registered for public trading under the Securities Act of 1933, as amended, while the existing privately issued notes had not been registered. Fleming said that it expected to commence the exchange offer as soon as practicable.

U.S. Industries extends consent deadline for 7 1/8% '03 notes

U.S. Industries, Inc. said on Friday (Oct. 18) that it had reached agreement with certain of its bondholders to extend the consent deadline of its previously announced offer to exchange cash (expected to approximate $109 million) and new notes for all of its outstanding 7 1/8% senior notes due 2003 to midnight ET on Nov. 1; previously, the consent deadline had been midnight ET on the later of either Oct. 18 OR the date on which holders of a majority of the outstanding notes deliver their consents to proposed indenture changes. The consent deadline will thus now coincide with the expiration of the tender offer. As a result, U.S. Industries will pay the consent payment as well as the exchange offer consideration for all of the 7 1/8% notes validly tendered (with concurrent consents) by the expiration and accepted in the exchange offer.

The company said that the extension had been requested by the bondholders to allow them sufficient time to review the amended offering circular and the allocation of proceeds from the previously announced sale of its SiTeco Holdings unit to the 2003 notes. As of Oct. 18, approximately $88.6 million of the outstanding notes have been deposited with the exchange agent for exchange.

U.S. Industries also said that it expects to circulate a consent solicitation statement and tender documents next week in connection with its previously announced plans to tender for its 7 ¼% senior notes due 2006. The company plans to offer to purchase the 2006 notes equal to the cash in the collateral account (expected to approximate $55 million) that secures the notes. Bondholders will be able to receive a copy of these materials free of charge from USI when they become available.

Georgeson Shareholder Communications Inc. is the information agent for the exchange offer and consent solicitation (banks and brokers should call collect at 212 440-9800; all others should call toll- free at 866 807-2995).

AS PREVIOUSLY ANNOUNCED, U. S. Industries, Inc., a West Palm Beach, Fla.-based company which makes and markets branded bath and plumbing products, as well as vacuum cleaners for the consumer market, said on Sept. 9 that it had begun an offer to exchange cash and new debt with a higher interest rate and longer maturity for all of its $250 million of outstanding 7 1/8% notes. U.S. Industries said that the exchange offer was undertaken in connection with its previously announced plan to extend the maturity of its debt. The company said that if the exchange offer were to be consummated, holders tendering their notes on or before the expiration deadline (originally set as midnight ET on Oct. 4, but later extended) would receive an amount of cash and principal amount of new 9 1/8% senior notes due Dec. 31, 2005 (the interest rate on the new notes was subsequently raised) that together would be equal to the principal amount of the existing notes tendered. The other terms of the new notes would be substantially similar to the existing notes.

U.S. Industries also said that in connection with the exchange offer, it was soliciting consents from a majority of the holders of the current notes to a proposed indenture amendment. That amendment would allow the cash deposited in a cash collateral account from the sales of U.S. Industries' non-core assets that is proportionally allocable to tendering holders to be used to pay the cash consideration portion of the exchange offer.

The company said that in addition to the consideration, it would pay a consent payment of $5 per $1,000 principal amount of notes tendered (to be paid out of the company's general working capital) to those holders delivering their consents to the proposed amendment by tendering their notes for exchange by the consent date. That consent date would be the later of either Sept. 20 OR the date on which holders of a majority of the current notes deliver their consents to the proposed indenture amendment (the consent payment was subsequently raised and the consent deadline extended).

The company said it anticipated that the amount of cash it would have available to distribute in exchange for the validly tendered existing notes would be approximately $110 million, of which $89.3 million is currently on deposit in a cash collateral account. As previously announced, the company said it expected to complete the sale of its SiTeco Holdings GmbH subsidiary prior to the expiration date of the exchange offer, and expects to allocate approximately $21 million of the proceeds from that sale to collateralize the current notes, and accordingly, pay this cash to the tendering holders of those notes. The cash allocable to those existing notes that are not exchanged will remain in the cash collateral account. Upon consummation of the sale of SiTeco, U.S. Industries intends to promptly publicly announce the amount of sale proceeds allocable to the holders of the existing notes. If for any reason the SiTeco sale is not consummated by the expiration date, that amount will not be available to be distributed in the exchange offer.

U.S. Industries further announced that it had received agreement from the lenders holding a majority of the commitments under its senior bank facilities to extend the maturity of its bank debt, which is subject to customary conditions including the execution by 100% of the lenders under U.S. Industries' senior bank facilities of final documentation providing for the extension. The amendment would extend the maturity date of the bank debt from Nov. 30 of this year to Oct. 1, 2003, with a further automatic extension to Oct. 4, 2004 if the exchange offer is successful.

With the proceeds from its previously announced asset disposal plan and working capital initiatives, U.S. Industries said it will have reduced its total net debt and letters of credit outstanding to approximately $602 million - a reduction of approximately $751 million since June 30, 2001 - after application of the anticipated proceeds of the SiTeco sale. That debt reduction includes paydown of the company's senior debt and the credit facilities of Rexair Holdings, Inc. and Rexair, Inc. (which were acquired in August of 2001), the reduction of letter of credit facilities and the amounts deposited into collateral accounts for the benefit of the holders of our senior notes and other creditors.

The company said the exchange offer and the related consent solicitation would be subject to customary conditions, including the participation of a minimum of 90% of the current holders of 7 1/8% notes, the receipt of the requisite consents to the indenture amendment and satisfactory amendment of the bank debt.

On Oct. 4, U.S. Industries said that it had extended its exchange offer and the related consent solicitation until 12 midnight ET Nov. 1, subject to possible further extension, from the previous Oct. 4 deadline. The consent deadline was extended to midnight ET on the later of either Oct. 18 OR the date on which holders of a majority of the outstanding 7 1/8% notes deliver their consents to the proposed indenture amendment.

The company also said that it has amended the terms of the offer, raising the interest rates on the new notes it is offering from the originally announced 9 1/8% to 11 ¼%.

It also said that the supplemental indenture which will be executed will provide that (1) USI will redeem the new notes at par to the extent the balance allocable to the new notes in the cash collateral account equals or exceeds 10% of the outstanding principal amount; (2) USI may redeem the new notes at par with the cash in the cash collateral account at any time; and (3) the new notes will be redeemable at the discretion of USI at the following percentages of the principal amount redeemed:

-- 103% until the first anniversary of the date the notes are issued

-- 102% until Dec. 31, 2004

-- 101% thereafter until maturity

The Indenture will also be amended to permit payment of the consideration in this and future exchange or tender offers.

U.S. Industries additionally raised the cash consent payment to be paid to holders who validly deliver consent to the indenture amendments by tendering by the consent deadline to 1.5% of the principal amount of the new notes issued to them in exchange for the existing 7 1/8% notes at the consummation of the exchange offer. Holders who do not deliver their consents by the consent date will not receive the consent payment. As of Oct. 3, approximately $6.11 million of the $250 million outstanding principal amount of the existing notes had been deposited with the depositary for exchange. Under terms of the exchange offer, holders may withdraw their tenders of the existing notes and revoke their consents prior to the consent deadline, but not afterward.

USI further said that it also intends to make a tender offer to purchase at par its outstanding 7 ¼% senior notes due 2006 in an aggregate principal amount equal to the balance in the cash collateral account allocable to those notes. USI will simultaneously make a related consent solicitation to amend the applicable Indenture to allow USI to pay the tender offer consideration to tendering holders from the cash collateral account on a pro rata basis, based on the amount of notes tendered relative to the outstanding amount of notes, and to provide that USI will make future offers to purchase 7 ¼% notes with cash from the cash collateral account when the balance allocable to those notes equals or exceeds 10% of the outstanding notes. The tender offer for the 7 ¼% notes will be conditioned upon the consummation of the exchange offer for the 7 1/8% notes, among other conditions.

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