Brand Services, Brand Energy accept tenders for almost all of 12%, 13% notes

By Laura Lutz

Washington, Feb. 7 - Brand Services, Inc. announced the results of its tender offers for its 12% senior subordinated notes due 2012. Brand Energy & Infrastructure Services, Inc. also completed its tender offer for its 13% senior subordinated pay-in-kind notes due 2013. Both offers expired at 5 p.m. ET on Feb. 6.

Holders tendered $149.001 million, or 99.33%, of its $150 million outstanding principal amount of the 12% notes and $57,905,175, or 99.99%, of its outstanding principal amount of the 13% notes.

Tender for 12% notes

For each $1,000 principal amount of 12% notes that were tendered before the consent deadline on May 22, Brand Services paid $1,100.65.

That price is based on the present value of cash flows to the first call date of Oct. 15, 2007, when the notes are callable at $1,060 per $1,000 principal amount, discounted using a rate of 50 basis points - reduced from 62.5 bps - over the yield of the 4% U.S. Treasury note due Sept. 30, 2007 calculated on the pricing date. The reference yield was 5.15%.

The total includes a consent payment of $30.00 per $1,000 principal amount of notes tendered by the consent deadline.

Brand Services also paid accrued interest up to but excluding the payment date.

Originally set for June 7, the deadline was previously extended to June 28, July 13, July 21, Aug. 1, Sept. 15, Sept. 22, Nov. 9, Nov. 20, Dec. 5, Dec. 12, Dec. 27, Jan. 9, Jan. 22 and Feb. 1.

The pricing date was also moved to 10 a.m. ET on Jan. 18 from Jan. 5. Previously, pricing was set for June 7, June 28, July 18, Aug. 31, Sept. 8, Oct. 26, Nov. 20, Nov. 28, Dec. 12 and Dec. 22.

Also on Jan. 4, the company ended the condition that it complete an initial public offering because of parent company Brand Holdings, LLC's announced stock purchase agreement, under which FR Brand Acquisition Corp., an entity majority-owned by funds sponsored by First Reserve Corp., will acquire all of Brand Holdings' stock.

The offer was conditioned on the completion of the acquisition.

The company had received tenders for 98.67% of the notes as of Jan. 17, unchanged from May 22.

Brand Services announced the tender offer and consent solicitation on May 9. On May 16, it tightened the spread in the payout.

The consent solicitation allowed the company to amend the note indenture to eliminate nearly all of the restrictive covenants and certain events of default.

Tender for 13% notes

Brand Energy paid $1,112.24 for each $1,000 principal amount of 13% notes that were tendered before the consent deadline at 5 p.m. ET on Jan. 17.

The price is based on the present value of cash flows to the first call date of Oct. 15, 2007, when the notes are callable at $1,065, discounted at a rate equal to 50 bps over the yield to maturity on the 4% Treasury due Sept. 30, 2007. The reference yield was 5.15%.

Notes tendered after the consent deadline received the same amount, less a $30.00 consent payment for each $1,000 principal amount of notes.

As of the consent deadline, the company had received tenders and consents for 99.99% of the notes.

The consents allow the company to, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture.

Pricing was set at 10 a.m. ET on Jan. 18.

Holders who tender must deliver consents.

The offer was conditioned on, among other things, the completed acquisition and the receipt of consents from a majority of noteholders.

Credit Suisse Securities (USA) LLC is dealer manager and solicitation agent (800 820-1653 or call collect 212 538-0652). D.F. King & Co., Inc. is the information agent (800 949-2583).

Brand Services is a Kennesaw, Ga., provider of scaffolding services.

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