Tyco gets needed consents for seven notes series in bondholder litigation settlement

By Jennifer Chiou

New York, April 28 - Tyco International Ltd. announced that it obtained consents from holders of a majority of its 6 1/8% notes due 2008, 6 1/8% notes due 2009, 6¾% notes due 2011, 6 3/8% notes due 2011, 6% notes due 2013, 7% notes due 2028 and 6 7/8% notes due 2029 related to a bondholder litigation settlement.

The company asked holders to consent to a waiver of all alleged defaults related to Tyco's June 2007 separation into three publicly traded companies and to provide the holders with the right to repurchase at a fixed price under circumstances in case of a change of control.

As of 5 p.m. ET on April 28, the company received consents for 88% of the 6 1/8% notes due 2008, 95% of its 6 1/8% notes due 2009, 97% of its 6¾% notes, 96% of its 6 3/8% notes, 98% of its 6% notes, 98% of its 7% notes and 98% of its 6 7/8% notes.

Tyco noted that it expects that the supplemental indentures will become effective.

On April 11, the company said that it reached a preliminary agreement to settle a lawsuit related to its $3.7 billion of outstanding debt securities. The agreement was reached with firms that advise holders of about 80% of the debt.

In addition, Tyco received tenders from holders of 96% of its 7% notes and 97% of its 6 7/8% notes in an exchange offer only to qualified institutional buyers under Rule 144A. The new notes will have substantially the same terms as the existing notes, but they will expire in 2019 and 2021, respectively.

Settlement of the agreement depends on the receipt of consents from holders of a majority of the notes.

The new consent date is 5 p.m. ET on May 12.

As already reported, in exchange for dismissal of the lawsuit and a waiver of any alleged default, the agreement calls for Tyco to make a total cash payment of $250 million to the holders of the securities. None of the debt will be redeemed as a result.

Tyco also previously agreed to offer to exchange its notes due 2028 and 2029 for notes with maturities in 2019 and 2021, respectively.

Based in Pembroke, Bermuda, Tyco produces electronics, fire and security, health care and engineered products and services.

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