Chesapeake Corp. completes tender for 7.20% debentures, 78.5% purchased

New York, Dec. 21 - Chesapeake Corp. said it completed its tender offer for its 7.20% debentures due 2005, buying $66.8 million or 78.5% of the total.

The response to the offer is the same as the company reported on Dec. 8 at the expiration of the consent deadline on Dec. 2.

The tender offer expired at Dec. 20.

Chesapeake Corp., a Richmond, Va.-based packaging producer, announced the tender offer on Nov. 18 and said it was also soliciting consents to amend the note indenture to eliminate the principal restrictive covenants and allow satisfaction and discharge of any debentures not tendered.

The company is paying $1,011.98 per $1,000 principal amount for notes tendered by the consent deadline of 5 p.m. ET on Dec. 2, including the $10 consent payment. For notes tendered subsequently, the payment is $1,001.98 per $1,000 principal amount.

Pricing was set on Dec. 6 as the present value on the initial payment date of the $1,000 payable at maturity on March 15, 2005, plus the present value of interest from the last interest payment date until the maturity date, discounted using a 50 basis points over the bid-side yield of the 1.5% U.S. Treasury note due Feb. 28, 2005. From this total will be subtracted accrued interest from the last interest payment date up to but excluding the initial payment date.

The total includes a consent payment of $10.00 per $1,000 principal amount that will only be paid to holders who tender by the consent deadline.

All holders will receive accrued interest from the last interest payment date up to but excluding the applicable payment date.

The company said it plans to fund the tender with proceeds from the issuance of new long-term debt or with borrowings under its existing senior bank credit facility.

The offer is subject to conditions, including the company entering into satisfactory financing and the receipt of consents from holders of 51% of the debentures.

Global Bondholder Services Corp. is the information agent (866 873-6300 or call collect 212 430-3774). Banc of America Securities LLC is the dealer manager and solicitation agent (contact High Yield Special Products at 888 292-0070 or call collect 704 388-9217).

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