American Seafoods abandons tender for 10 1/8% notes

New York, Aug. 13 - American Seafoods Group LLC (B3/B) and American Seafoods Finance Inc. said they have terminated their previously announced cash tender offer to purchase any and all of their outstanding $175 million of 10 1/8% senior subordinated notes due 2010.

Word that the tender offer had been terminated was included in a company announcement Aug. 12 that American Seafoods had indefinitely postponed its proposed sale of $450 million of Income Deposit Securities - previously downsized from the originally intended $550 million - due to unfavorable market conditions.

Completion of the IDS sale had been a condition to the consummation of the tender offer.

American Seafoods, a Seattle-based harvester and processor of fish products, had begun the tender offer on Sept. 15, 2003 along with a related solicitation of noteholder consents to indenture changes aimed at eliminating substantially all of the restrictive covenants, certain repurchase rights and certain events of default and related provisions.

The company set a consent deadline, which expired as scheduled at 5 p.m. ET on Sept. 26, 2003 without extension; as of the deadline, the company had received the tender of $174.93 million principal amount of the notes, more than the amount of consents needed to approve the indenture amendments (the remaining notes were all tendered by Oct. 23, 2003). It initially said the tender offer would expire at midnight ET on Oct. 10, 2003, although this expiration date was subsequently extended a number of times as the company tried to bring its initial public offering of IDS to market, most recently to 5 p.m. ET on Aug. 10.

The company was to have paid total consideration of $1,200 per $1,000 principal amount of notes tendered and accepted for purchase, including a $30 per $1,000 principal amount consent payment, to noteholders who tendered by the consent deadline. Holders tendering after the consent deadline would have received consideration of $1,170 per $1,000 principal amount but no consent payment. All tendering holders would have also received accrued interest up to but not including the payment date.

The company is expected to return all tendered notes to their holders.

When the consent solicitation expired, a supplemental indenture incorporating the desired changes was executed by American Seafoods Group LLC and American Seafoods Finance Inc., the guarantors of the securities, and Wells Fargo Bank Minnesota NA, as trustee. With the termination of the tender offer, however, the approved amendments will not become operative, since they were to have taken effect only after the notes were accepted by the company for purchase.

Credit Suisse First Boston LLC was the dealer manager for the terminated offer and the solicitation agent for the related solicitation (800 820-1653). MacKenzie Partners Inc. was the information agent (212 929-5500), and Wells Fargo Bank Minnesota NA was the depositary.

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