Dresser receives required consents for 9 3/8% notes

By Jennifer Chiou

New York, June 1 - Dresser, Inc. said it obtained the required consents for its $550 million of 9 3/8% senior subordinated notes due 2011.

The expiration was 5 p.m. ET on May 31. It had been extended from 5 p.m. ET on May 26.

The company said it executed a supplemental indenture.

Under the changes announced on May 26, the consent payment on offer is $2.50 per $1,000 principal amount of notes, up from $1.25.

Dresser previously said it will also increase the interest rate on the notes by 50 basis points until it files reports required under the note indenture.

In addition, holders of record as of Dec. 31, 2006 will receive a 50 bps payment if the company has not filed its financial statements for the quarters ended March 31, June 30 and Sept. 30, 2006, by Dec. 31, 2006. In return for the payment, the company will have until March 31, 2007 to make the filings.

The interest rate on the notes will also step up by 25 bps for any period during which the notes are rated CCC+ or lower by Standard & Poor's. It will increase by a further 25 bps for any time period during which the notes are rated Caa1 or lower by Moody's Investors Service.

Dresser began the solicitation on May 9, saying it was seeking the amendment and waiver of certain reporting requirements in the note indenture related to its previously announced delay in issuing its 2005 annual and 2006 quarterly financial statements.

The proposed amendment and waiver would permit Dresser to extend to Dec. 31, 2006 its obligation to file financial statements with the Securities and Exchange Commission for the year ended Dec. 31, 2005 and the quarters ended March 31, 2006, June 30, 2006 and Sept. 30, 2006.

In addition, Dresser said the consent solicitation would provide for a waiver of all past and present defaults under the indenture's reporting requirements.

MacKenzie Partners, Inc. is the information agent (800 322-2885 or call collect 212 929-5500). Morgan Stanley & Co., Inc. is the solicitation agent (800 624-1808 or call collect 212 761-1941).

Dresser is a manufacturer of equipment and services sold primarily to customers in the flow control, measurement systems, and compression and power systems segments of the energy industry.

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