ArvinMeritor wraps oversubscribed tender offer for 8¾% notes due 2012

By Susanna Moon

Chicago, March 23 - ArvinMeritor Inc. said investors tendered $264.2 million principal amount of its $276 million 8¾% notes due 2012.

The tender offer for up to $175 million of the notes expired at 11:59 p.m. ET on March 22. It began on Feb. 23.

ArvinMeritor said it will purchase 66.3% of the tendered notes based on the offer cap and the proration terms.

The company said on Feb. 26 that it increased the purchase price for each $1,000 principal amount accepted for purchase. Holders will receive $1,097.50 for notes tendered by 5 p.m. ET on March 8 and $1,067.50 for notes tendered after that time.

Holders will also receive accrued interest up to but excluding the settlement date, which was expected to be March 23.

ArvinMeritor will fund the purchase with the proceeds of its new $250 million 10 5/8% senior notes due 2018.

Boosting purchase price

Prior to the purchase price change, the company was offering $1,065.00 for notes tendered by the early tender date and $1,035.00 for notes tendered after that time.

The company said it increased the purchase price in the offer to one it believed was fair to investors and that would allow the company to successfully execute the tender offer.

The tender has the effect of extending the company's 2012 debt maturity, which "allows the business to focus on executing its strategies without any looming debt maturities and allows the stock to trade more based on the fundamental earnings power of the business," senior vice president of communications Lin Cummins noted previously in an e-mail.

Cummins said the offer fits with the company's investment strategy that it recently articulated at various investment venues.

ArvinMeritor wants to extend its revolving credit facility and 2012 debt maturities "to clear the runway for the next few years from a debt maturity standpoint," said Cummins.

Bank of America Merrill Lynch (888 292-0070 or collect 980 388-9217), JPMorgan (866 834-4666 or collect 866 834-3424), Citi (800 558-3745 or collect 212 723-6106) and RBS (877 297-9832 or collect 203 897-6145) are the dealer managers. Global Bondholder Services Corp. (866 540-1500 or collect 212 430-3774) is the information agent and depositary.

Troy, Mich.-based ArvinMeritor is a supplier of integrated systems, modules and components to the motor vehicle industry.

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