Wolverine Tube gets needed consents for 10½% notes, extends tender offer until April 27

By Susanna Moon

Chicago, April 21 - Wolverine Tube, Inc. said it received $83.2 million principal amount, or 84%, of its 10½% senior notes due 2009 as of 5 p.m. ET on April 20.

Combined with the $38.3 million of 10½% senior exchange notes that will be exchanged with the closing of the offer, holders of $121.5 million, or 88%, of Wolverine Tube's $138 million principal amount of notes have agreed to exchange their notes for the company's 15% senior secured notes due 2012, according to a press release.

As a result, Wolverine Tube said it believes that it has sufficient tenders from holders to complete the offer and refinance its debt.

The company said it executed a supplemental indenture with Wolverine Tube's subsidiary guarantors and U.S. Bank NA, as trustee. The amendments eliminate substantially all of the restrictive covenants and some events of default and related provisions.

The company sought consents to amend the indenture to allow the exchange offer to be completed.

Wolverine Tube said it waived the condition to the offer that holders of at least 95% of the outstanding principal among of existing notes tender and, in accordance with the requirements of Federal securities laws, has extended the deadline to 11:59 p.m. ET on April 27 from April 20. The offer began on Feb. 25.

Offer details

For each $1,000 principal amount of existing notes tendered, the company is offering $1,000 principal amount of new 15% senior secured notes due March 31, 2012 and the cash exchange fee, which is equal to 3%, up from 2%, of the principal amount of new notes issued to the holder.

The new notes were previously to have been 10% senior secured notes due 2011.

Before that, the other option included up to $850 principal amount of new notes, a cash payment of at least $150 and the cash exchange fee.

Interest on the new notes, now increased to 15%, will be made up of 10% payable in cash and 5% payable by issuing additional new notes.

If the outstanding principal amount of new notes at the close of business on March 31, 2010 exceeds $90 million, the interest rate will increase to 16%, of which 10% will be payable in cash and 6% will be payable in kind.

If the outstanding principal amount of new notes at the close of business on March 31, 2011 exceeds $60 million, the interest rate will increase to 17%, of which 10% will be payable in cash and 7% will be payable in kind.

Previously, the cash interest rate would have increased to 12% as of April 1, 2010.

Wolverine Tube will also have the option to pay interest on the new notes either in cash or by issuing additional new notes, and with respect to any interest period for which the company elects to pay PIK interest, the interest rate will equal the sum of the cash interest rate plus 4%.

Further, the company said it will be permitted to enter into a new secured revolving credit facility only with the consent of holders of at least 66 2/3% of the new notes and only if Wolverine Tube redeems an amount of new notes equal to 55% of the eligible Nafta inventory and eligible Nafta accounts receivable.

As already reported, the company needs consents from holders of a majority of the notes. Holders who tender will be deemed to have delivered consent.

Wolverine Tube noted that the indenture governing the new notes will include restrictive covenants and events of default similar to the ones currently contained in the existing notes' indenture.

Noteholders will also receive accrued interest up to but excluding the payment date.

The offer is subject to the receipt of tenders for at least 95% of the existing notes.

The company previously said that Plainfield Special Situations Master Fund Ltd., an affiliate of Wolverine Tube and holder of about $9.86 million of the existing notes and $38.3 million of Wolverine Tube's 10½% senior exchange notes due 2009, has agreed to tender all its notes.

"The amended exchange offer released today incorporates further comments from noteholders that should be the basis for a successful exchange offer and refinancing of Wolverine's existing maturities," Steven S. Elbaum, chairman of Wolverine Tube, said in a prior news release.

"The company has indications of support from over 75% of the holders of 10½% notes, which matured April 1, 2009, and 100% of the 10½% notes, which matured March 27, 2009."

The exchange offer and consent solicitation are being made to noteholders who are qualified institutional buyers, non-U.S. persons outside the United States and institutional accredited investors.

D.F. King & Co., Inc. (800 901-0068 or 212 269-5550) is the information agent.

Wolverine Tube is based in Huntsville, Ala., and makes copper and copper alloy tube, fabricated products and metal joining products.

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