CBRL accepts tenders for 89% of notes in exchange offer for LYONs due 2032; remainder called

By Jennifer Chiou

New York, May 1 - CBRL Group Inc. said it received tenders from holders of $375.931 million principal amount at maturity of Liquid Yield Option Notes due 2032, or about 89% of the notes, in the exchange offer in which it will issue new zero-coupon senior convertible notes due 2032.

The offer ended at 5 p.m. ET on April 30, prolonged from April 16. It began on March 20.

The Lebanon, Tenn.-based operator of the Cracker Barrel Old Country Store restaurant chain said it will issue an equal amount of new notes for the LYONs and will also pay an exchange fee of $1.20, increased from $0.60, per $1,000 principal amount of old notes. The exchange date is slated for May 3.

Upon completion of the exchange offer, the company said it intends to redeem the new notes as well as the $46.099 million of old notes that remain outstanding on June 4.

The redemption price of both the old notes and the new notes is $477.41 per $1,000 in principal amount at maturity, for a total redemption price of about $201 million if no holders convert their securities.

According to CBRL, the primary difference of the new notes will be the addition of a net share settlement feature.

As is the case with the old notes, the new notes will be convertible into 10.8584 shares of CBRL stock. The net share settlement feature will allow the company, upon conversion of a new note, to satisfy a portion of the conversion in cash rather than with shares.

In addition, CBRL will be able to redeem the new notes after giving a 30-day notice, modified from a 15-day notice in the original offer announcement.

CBRL said it will use its $200 million delayed-draw term loan or cash on hand for the redemption, which might be completed before the end of the company's fiscal year on Aug. 3.

On March 6, the company said that noteholders had the right to put back the old notes at a price equal to $475.01 per $1,000 principal amount at maturity until 5 p.m. ET on April 3.

By the deadline, holders had put back $20,000 of the notes.

Because each old note is convertible into 10.8584 shares, the put value was the equivalent of $43.75 per associated common share. Based on the March 19 closing price for CBRL stock of $48.44, the conversion value exceeded the put value, and the company previously said it did not expect holders to exercise their put right.

Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 470-4300).

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