Crown tenders for second-, third-priority notes due 2011 and 2013

By Jennifer Chiou

New York, Oct. 18 - Crown Holdings, Inc. launched tender offers for any and all of subsidiary Crown European Holdings SA's notes.

The Philadelphia packaging company is also soliciting consents to amend the notes' indentures, eliminating all restrictive covenants, reporting requirements and events of default as well as releasing the collateral securing the notes.

Affected notes include $1.085 billion 9½% second-priority senior secured notes due March 1, 2011, €285 million 10¼% second-priority senior secured notes due March 1, 2011 and $725 million 10 7/8% third-priority senior secured notes due March 1, 2013.

The consent deadline is 5 p.m. ET on Oct. 31.

Those who tender their holdings by the consent deadline will receive the applicable consent payment of $20.00 per $1,000 principal amount or €20.00 per € 1,000 principal amount.

The tender offers end at 5 p.m. ET on Nov. 16, unless extended.

For each $1,000 principal amount of 9½% notes, the company will pay $1,047.50 - the present value of the notes on March 1, 2007, the earliest redemption date - discounted using the yield to maturity of the 3 3/8% Treasury due Feb. 28, 2007 plus 50 basis points.

For each €1,000 principal amount of 10¼% notes, Crown Holdings said it will pay an amount based on the present value of the initial payment date of €1,051.25 - the redemption price for the notes on March 1, 2007, the earliest call date - discounted using the yield to maturity of the 4% OBL #139 due Feb. 16, 2007.

For each $1,000 principal amount of 10 7/8% notes, the company will pay $1,054.38 - the present value of the notes on March 1, 2008, the earliest redemption date - discounted using the yield to maturity of the 3 3/8% Treasury due Feb. 15, 2008 plus 50 basis points.

The payouts include the consent payment.

The company will also pay accrued interest up to but excluding the payment date.

Pricing will be determined at 2 p.m. ET on Oct. 31.

The offers are conditioned upon the receipt of consents from holders of at least two-thirds of the notes, new senior credit facilities and the issuance of new senior unsecured notes satisfactory to the company's refinancing plan.

Citigroup Corporate and Investment Banking (800 558-3745 or call collect 212 723-6106) and Lehman Brothers (800 438-3242 or call collect 212 528-7581) are the dealer managers and solicitation agents.

D.F. King & Co., Inc. is the information agent (800 628-8536).

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