Playboy tenders for 11% notes

New York, Feb. 22 - Playboy Enterprises, Inc. said its PEI Holdings, Inc. subsidiary has begun a cash tender offer and consent solicitation for all $80 million of its 11% senior secured notes due 2010.

The consent solicitation is to amend the note indenture to eliminate substantially all of the restrictive covenants and certain events of default and release all of the related guarantees and collateral.

The Chicago men's entertainment company is offering $1,186.68 for each $1,000 principal amount of notes validly tendered with consents by the consent deadline of 5 p.m. ET on March 7. The total includes a consent payment of $20 per $1,000 principal amount.

Holders tendering after the consent deadline but before the expiration date of 9 a.m. ET on March 22 will receive $1,166.68 per $1,000 principal amount.

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

Holders who tender must deliver consents.

Playboy said it expects to fund the tender with either available cash, borrowings under its existing credit facility, new debt financing or a combination.

The offer is subject to conditions including the receipt of valid tenders for at least 66 2/3% of the outstanding notes and the availability of sufficient financing.

UBS Investment Bank is the dealer manager (contact Liability Management Group collect at 203 719-4210 or 888 722-9555 x4210). Global Bondholder Services Corp. is the information agent (866 612-1500).

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