Allied Waste completes tender for 10% notes

New York, April 20 - Allied Waste Industries Inc. (Ba3/BB-) said it completed its previously announced tender offer for up to $1 billion of the 10% senior subordinated notes due 2009 (B2/B+) issued by its Allied Waste North America Inc. subsidiary, which expired as scheduled at 9 a.m. on April 20, without extension.

The company said that as of that deadline, a total of $1.004 billion of the notes had been tendered under the offer, up slightly from the $1.002 billion tendered by the April 5 early tender deadline. All of the tendered notes were accepted by Allied Waste for purchase by the company at a total cost to Allied Waste of $1.078 billion.

Allied Waste said the settlement price for the notes was funded through the concurrently completed offering by Allied of $230 million in principal amount of new 4¼% senior subordinated convertible debentures due 2034 (which includes the $30 million exercise of the over-allotment offer by the underwriters); the offerings by Allied Waste North America of $275 million of new 6 3/8% senior notes due 2011 and $400 million of new 7 3/8% senior unsecured notes due 2014, and the proceeds from Allied Waste North America's recently funded $150 million term loan facility.

As previously announced, Allied Waste, a Scottsdale, Ariz.-based waste disposal company which issued $2 billion of the 10% notes in July 1999, announced on March 22 that Allied Waste North America had begun a cash tender offer for up to $1 billion principal amount of the notes.

It set 5 p.m. ET on April 2 as the early tender deadline and said that the tender offer would expire at 9 a.m. on April 20, subject to possible extension.

Allied Waste said it was offering to purchase up to $1 billion of the notes for $1,073.50 per $1,000 principal amount, plus accrued and unpaid interest up to but excluding the settlement date. The company said that total would include a $10 per $1,000 principal amount early tender premium for those holders tendering by the early tender deadline, while holders tendering after the early tender deadline but before the expiration would receive $1,063.50.

The company said that if the total principal amount of notes validly tendered under the offer and not properly withdrawn were to exceed $1 billion, Allied Waste would accept notes for purchase on a pro rata basis based on the principal amount tendered.

Allied Waste said that it wanted to take advantage of favorable market conditions and interest rates to refinance the notes for which it was tendering, allowing it to reduce its overall interest cost and extend maturities. Concurrently with the tender offer, Allied Waste said it was seeking to amend its existing senior credit facility to, among other things, give it the ability to issue up to $1.1 billion of debt, of which up to $500 million could consist of senior secured debt and the remainder senior unsecured debt. The company said that this would complement the flexibility that Allied Waste currently has under the terms of its existing senior credit facility to issue senior subordinated debt.

On April 5, Allied Waste said that $1.002 billion of the 10% notes had been tendered by the early tender deadline (5 p.m. ET on April 2).

The company said it planned to accept all notes tendered under the terms of the offer, as long as no more than $25 million of additional notes would be tendered. It said that were more than $25 million of additional notes to be tendered, it would then accept notes for purchase on a pro rata basis.

The company said the tender offer would be contingent upon the satisfaction of certain conditions, including the receipt by Allied Waste of about $1 billion in gross proceeds through a combination of additional borrowings under its senior credit facility and one or more public and/or private securities offerings to be completed prior to the settlement date (on April 7, Allied Waste North America was heard by high-yield syndicate sources to have sold $675 million of new bonds in a two-part offering consisting of 10-year and seven-year notes).

The company warned that should any of the conditions not be satisfied, Allied Waste would not be obligated to accept for payment, purchase or pay for, and could delay the acceptance for payment of, any tendered notes, or could terminate the tender offer.

UBS Securities LLC (888 722-9555 ext. 4210) and Citigroup Global Markets Inc. (800 558-3745) were dealer managers for the tender offer. D.F. King & Co. Inc. was the information agent (888 628-9011 or 212 269-5550).

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