K&F buys back nearly all its $315 million of 7¾% notes in tender

By Susanna Moon

Chicago, July 23 - K&F Industries, Inc. said investors tendered $314.9 million, or 99.97%, of its outstanding 7¾% senior subordinated notes due 2014 by the consent deadline.

The consent solicitation expired at 5 p.m. ET on July 20. The tender offer ends at midnight ET on Aug. 3.

K&F said it received the required consents to amend the indenture. K&F and U.S. Bank National Association will execute a third supplemental indenture, which eliminates or modifies substantially all of the restrictive covenants.

On July 9, K&F, a subsidiary of Meggitt-USA, Inc., announced the cash tender offer and consent solicitation for all its 7¾% notes.

K&F said the offer followed Meggitt's acquisition of parent company, K&F Industries Holdings, Inc. The company said the tender also exceeds its obligation to offer to repurchase the notes for 101% following a change of control.

For each $1,000 principal amount, the company will calculate its payout, in part, using the 4.625% Treasury due Nov. 15, 2009 and 50 basis points as well as the product of 65% and the present value of scheduled payments up to the notes' initial redemption date, plus the product of 35% and $1,077.50, which is equal to the price at which K&F is permitted to redeem up to 35% of the notes with the proceeds of an equity offering, which includes a capital contribution from its parent.

Those who tender will also receive accrued interest up to the settlement date.

Included in the total consideration is a payment of $30.00 per $1,000 principal amount for those who tender by the early deadline.

Barclays Capital Inc. is the dealer manager (Attention: Liability Management, 866 307-8991 or call collect 212 412-4072). Georgeson Inc. is the information agent (888 605-7549 or call collect 212 440-9800).

K&F is based in White Plains, N.Y., and manufactures braking equipment for commercial transport, general aviation and military aircraft through its Aircraft Braking Systems Corp. subsidiary.

Christchurch, England-based Meggitt specializes in aerospace equipment, sensing and defense systems.

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