Nortek gets tenders for 88.5% of 11% notes, enough to pass amendments

By Susanna Moon

Chicago, April 26 - Nortek, Inc. said it received tenders and consents from the holders of $666,580,398 principal amount, or about 88.5%, of its $753,333,333 11% senior secured notes due 2013 by the consent deadline at 5 p.m. ET on April 25.

The tendered consents were more than enough to approve the proposed amendments to the notes, and the company entered into a supplemental indenture, according to a company press release.

Nortek sought consents to amend the notes to eliminate substantially all of the restrictive covenants and events of default and to provide for a shorter notice period for voluntary redemptions.

The company will pay $1,052.50 for each $1,000 principal amount of notes, including a consent fee of $30.00 for notes tendered by the consent date.

Holders also will receive accrued interest up to but excluding the settlement date.

Nortek said it also called the outstanding 11% notes.

Under the note terms, the company may redeem the 11% notes at 103 plus accrued interest once during any 12-month period, provided that the total amount of the redemptions does not exceed $75 million.

The notes are redeemable at 105 beginning June 1, at 102.5 beginning June 1, 2012 and at par beginning June 1, 2013.

If notes remain outstanding after the tender offer, the company previously said it will redeem up to $75 million of them at 103 and the remainder at 105.

Nortek said on April 20 that it amended the tender offer, lowering the base denomination of the notes required to be tendered to $1.00 from $1,000.

The tender offer will continue until 12:01 a.m. ET on May 10. It began April 12.

As previously noted, the company expects to finance the repurchase with proceeds from its $500 million issue of 8½% senior notes due 2021 and borrowings under a new $350 million senior secured term loan due 2017.

The tender offer is conditioned on the receipt of at least $500 million of proceeds from a capital markets transaction, the entry into the term loan facility, the receipt of the required consents, the execution of an amendment to Nortek's asset-based revolving credit facility permitting the refinancing and the execution of a supplemental indenture amending the notes.

The company priced $500 million of 10-year senior notes at par to yield 8½% on April 12 and launched its $350 million six-year senior secured covenant-light term loan on April 13 at Libor plus 400 basis points with a 1.25% Libor floor and an original issue discount of 991/2.

UBS Securities LLC (888 719-4210 or 203 719-4210) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 423-2107 or 212 269-5550) is the information agent.

Nortek is a Providence, R.I.-based manufacturer of residential and commercial ventilation, HVAC and home technology convenience and security products.

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