Nebraska Book, parent get requisite consents for 8¾%, 10¾% debentures

New York, Feb. 19 - Nebraska Book Co. Inc. and its corporate parent, NBC Acquisition Corp. (B3/B-), said they received the necessary consents to proposed indenture changes from the holders of Nebraska Book Co.'s 8¾% senior subordinated notes due 2008 and NBC Acquisitions' 10¾% subordinated discount debentures due 2009.

The consent deadlines for the respective tender offers expired as scheduled at 5 p.m. ET on Feb. 18, without extension. As of that time, holders of some 85.764% of the 8¾% notes had tendered their notes and delivered the related consents, as had the holders of some 86.178% of the principal amount at maturity of the 10¾% debentures.

The amendments have not yet become operative; this will occur when all notes and the debentures tendered are accepted for purchase. When the amendments become effective, they will be binding even upon any notes or debentures not tendered under the offers.

The tender offers continue and are scheduled to expire at midnight ET on March 3, subject to possible extension.

As previously announced, Nebraska Book Co. Inc., a Lincoln, Neb.-based textbook distributor, and its corporate parent, NBC Acquisition Corp. (B3/B-), said they had begun separate but concurrent tender offers for all $110 million of Nebraska Book Co.'s outstanding 8¾% notes and all $76 million outstanding principal amount of NBC Acquisitions' 10¾% debentures. The two companies said they were also soliciting consent of the respective noteholders to proposed changes in the indentures governing the two series of securities - something which they unsuccessfully tried to do last fall.

Nebraska Book and NBC Acquisition set separate but concurrent consent deadlines, now expired, of 5 p.m. ET on Feb. 18 and said their respective tender offers would each expire at midnight ET on March 3, with all deadlines subject to possible extension.

Nebraska Book said it would offer all tendering holders of its 8¾% notes a purchase price of $1,027.92 per $1,000 principal amount of notes tendered and accepted for purchase, as well as accrued and unpaid interest up to, but not including, the payment date. Noteholders tendering their notes by the consent deadline would receive an additional $1.25 per $1,000 principal amount consent payment, for total consideration of $1,029.17 per $1,000 principal amount, plus interest.

NBC Acquisition said it was offering all tendering holders of its 10¾% debentures a purchase price of $1,034.58 per $1,000 principal amount of notes tendered and accepted for purchase, as well as accrued and unpaid interest up to, but not including, the payment date. Debenture holders tendering their notes by the consent deadline would receive an additional $1.25 per $1,000 principal amount consent payment, for total consideration of $1,035.83 per $1,000 principal amount, plus interest.

In connection with the tender offers, Nebraska Book and NBC Acquisition said they were soliciting consents from holders of the notes and the debentures to amend indenture provisions, the second attempt by the two companies to do this within the past four months; on Oct. 23, the two companies announced that their solicitation of holder consents to changes in the indentures of the notes and the debentures, which had begun on Oct. 7, expired as scheduled on Oct. 22 without the companies having received the necessary consents from their holders.

In the current consent solicitations, Nebraska Book said it wanted the holders of its 8¾% notes to approve indenture amendments that would eliminate several indenture provisions, while NBC Acquisition was asking its 10¾% debenture holders to also approve similar amendments that would eliminate similar provisions:

Affected were:

-Article III - Covenants (Sections 3.2 through 3.14 and 3.17 only);

- Article IV - Successor Company (Subsection 4.1(iii) only); and

- Article VI - Defaults and Remedies (Subsections 6.1(6), 6.1(9), and 6.1(10)).

The companies set the now-fulfilled condition that adoption of the proposed amendments requires the consent of the holders of at least a majority in principal amount of the notes or the debentures, respectively. If these proposed amendments become operative, they will also delete any corresponding provisions in the notes or in the debentures themselves.

Nebraska Book and NBC Acquisition said they were undertaking the tender offers and consent solicitations in connection with a proposed recapitalization transaction, which involves funds affiliated with Weston Presidio Capital (which holds some 32.1% of the outstanding capital stock of NBC Acquisition) will acquire control over substantially all of the rest of the outstanding capital stock of the company.

At the closing of this recapitalization, it is expected that Weston Presidio Capital will, directly or indirectly, hold some 93.4% of the outstanding capital stock of NBC Acquisition, with the remaining 6.6% of capital stock to be held by members of the management of Nebraska Book Co. and NBC Acquisition. The recapitalization transaction will include the refinancing of the Nebraska Book's existing senior secured credit facility and the incurrence of other debt.

JPMorgan (call 212 270-9153) and Citigroup (call 800 558-3745 or 212 723-6106) will be the dealer-managers and solicitation agents for the tender offers and consent solicitations. Global Bondholder Services Corp. is the information agent (212 430-3774 or 866 857-2200).

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