Cap Cana settles tender for 9 5/8% notes, realizes effective $50 million debt reduction

By Jennifer Chiou

New York, May 8 - Cap Cana, SA said that it expected to settle its offer in which investors tendered $235.27 million, or 95.46%, of its 9 5/8% senior secured notes due 2013.

The exchange offer ended at 11:59 p.m. ET on April 30.

"Beginning in the fall of last year, we aggressively implemented a series of restructuring and cost reduction measures, which slashed our operating and administrative expenses," George Spence, executive vice president, said in a news release.

"At the beginning of 2009, we initiated a restructuring process for our $250 million of senior secured notes due 2013. This transaction has the effect of reducing Cap Cana's indebtedness by over $50 million."

The deadline for the offer had previously been April 27.

As already reported, the company expects to issue $129.28 million of its new 10% senior secured notes due 2016 and $125.87 million of its 10% senior secured recovery notes due 2016.

Cap Cana offered to exchange up to $137.03 million principal amount of its new 10% senior secured notes due 2016 and up to $133.75 million principal amount of its 10% senior secured recovery notes due 2016.

At the consent deadline, holders had tendered $157.21 million, or 62.88%, of the notes.

The company obtained consents to amend the notes to eliminate substantially all of the restrictive covenants and some events of default. It added that it executed a supplemental indenture after receiving the necessary consents.

As previously noted, Cap Cana paid a fee of $5.00 per $1,000 principal amount for notes tendered by the early consent payment deadline as well as accrued interest.

Taking into account the $3.55 million of notes held by Cap Cana in its account, the amount of outstanding notes is $246.45 million at the end of the offer.

Cap Cana announced the exchange offer and consent solicitation on March 31.

Weston International Capital Markets LLC (212 888-4560) was the dealer manager. Global Bondholder Services Corp. (866 924-2200 or 212 430-3774 for banks and brokers only) was the exchange agent and information agent.

Cap Cana is a Santo Domingo, Dominican Republic-based resort.

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