Centro NP prolongs consent solicitation for several notes series

By Jennifer Chiou

New York, Oct. 7 - Centro NP LLC announced that it has extended its consent solicitation to amend the indenture of six series of notes.

The solicitation will now expire at the earlier of 5 p.m. ET on Oct. 15 and 5 p.m. ET on the date that the company has received a sufficient number of consents to execute the supplemental indenture. It was previously scheduled to expire on Oct. 6.

The company's solicitation applies to its:

• $10 million of 7.97% senior notes due 2026;

• $25 million of 7.65% senior notes due 2026;

• $10 million of 7.68% senior notes due 2026 (Cusip 64806Q AF1);

• $10 million of 7.68% senior notes due 2026 (Cusip 64806Q AG9);

• $25 million of 6.9% senior notes due 2028 (Cusip 64806Q AK0); and

• $25 million of 6.9% senior notes due 2026 (Cusip 64806Q AL8).

For each $1,000 principal amount, the company said it will pay a consent fee of $35, which it said in a news release "offers tremendous value" in addition to the ability to shorten the maturity of the notes by 12 to 14 years, as detailed below.

On Oct. 5, a group of noteholders opposed to Centro NP's solicitation said it was willing to discuss alternate terms for the solicitation, which was announced on Sept. 16.

The proposed terms would give Centro some flexibility to address its upcoming maturities through additional borrowings while also limiting its ability to engage in asset transfers to entities that are not borrowers under the notes, according to a prior news release from the ad hoc committee of noteholders.

Centro has previously disclosed the transfer of significant amounts of property to Residual JV, an entity that is 51% owned by Centro parent Super LLC and 49% owned by Centro, the committee said, adding that Residual JV and Super are not borrowers under the notes and have no obligation to make payments on the notes.

The committee believes that these transactions were extremely detrimental to the credit profile of Centro and benefited Super shareholders at the expense of the noteholders.

In a previous news release, the committee said it is made up of "a number of institutional holders, many of which are familiar with Centro's publicly available financial statements and SEC filings."

The company is seeking consent from holders to:

• Add a put option that will require it to offer to repurchase the notes at par plus accrued interest on Jan. 15, 2014;

• Modify some defined terms and covenants to create a method of calculating the company's debt incurrence ratios that is uniform with the other series of issued notes; and

• Change the financial reporting covenant in the indenture to make it consistent with the other series of notes, which would permit Centro to discontinue filing reports with the Securities and Exchange Commission and instead deliver substantially the same kind of information to the trustee under the indenture.

Bank of America Merrill Lynch (888 292-0070 or 980 388-4603) is the solicitation agent. Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) is the information agent.

The noteholder committee can be contacted via Morrow & Co., LLC (800 662-5200 or 203 658-9400).

Centro is a New York-based real estate company.

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