WCI Communities begins exchange offer for 4% contingent convertibles

By Angela McDaniels

Tacoma, Wash., July 8 - WCI Communities, Inc. said it began an offer to issue new senior secured notes due 2013 in exchange for its $125 million of 4% contingent convertible senior subordinated notes due 2023.

Holders will receive $1,000 principal amount of new notes for each $1,000 principal amount of old notes exchanged, a company news stated.

For the first three years, interest on the new notes will accrue at 16% per year and will be payable by increasing the principal amount of the notes or by issuing PIK notes, according to a T-3 filing with the Securities and Exchange Commission.

After Aug. 5, 2011, interest on the new notes will accrue at 15% per year and may be paid in cash or in PIK notes.

In addition, the new notes will be callable at 102 beginning Aug. 5, 2010, at 101 beginning Aug. 5, 2011 and at par from Aug. 5, 2012 onward.

The exchange offer will expire at midnight ET on Aug. 4.

The exchange agent is Bank of New York Mellon Trust Co., NA (212 815-3687).

The offer is subject to conditions that include the receipt of tenders for at least 95% of the notes, the amendment of the company's credit facilities and the issuance of new second-lien notes.

WCI Communities is a builder of master-planned lifestyle communities based in Bonita Springs, Fla.

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