Service Corp. concludes partial tender for 6% notes

New York, April 22 - Service Corp. International (B1/BB-) announced the successful conclusion of its previously announced tender offer for up to $200 million of its 6% notes due 2005, which expired as scheduled at 11:59 p.m. ET on April 21, without extension.

As of that deadline, holders had tendered a total of $217.7 million of the notes, oversubscribing the tender offer. As previously announced, the company bought $200 million of the notes on a pro-rata basis, for a pro ration factor of 92%.

Tendering holders were paid a total of about $214.2 million. As of April 22, $72.5 million of the notes are still outstanding.

As previously announced, Service Corp., a Houston-based cemetery and funeral home operator, said on March 24 that it had begun a cash tender offer to purchase up to $150 million principal amount of its $272.451 million of outstanding 6% notes (this amount was subsequently increased to $200 million on March 30).

It initially set an early participation deadline of 5 p.m. ET on April 6 (later extended to April 13), and said the tender offer would expire at 11:59 p.m. ET on April 21, subject to possible extension.

Service Corp. said that it would offer $1,050 per $1,000 principal amount of notes validly tendered under the offer by the early participation deadline and accepted for purchase, plus accrued interest up to but not including the date of payment. Total consideration would include a $30 per $1,000 principal amount early participation payment.

The company said holders tendering their notes after the early participation deadline but before the offer expires, and whose notes are accepted for purchase, would receive $1,020 per $1,000 principal amount, plus interest.

Service Corp. initially said that if more than $150 million aggregate principal amount of notes were to be validly tendered under the terms of the offer and not subsequently withdrawn, it would accept notes on a pro rata basis. This figure was subsequently raised to $200 million.

The company said it was contemplating a debt financing to ensure sufficient cash resources for the retirement of its indebtedness, including the tender offer for the 6% notes, the potential redemption in June of its 6¾% convertible subordinated notes due 2008, and general corporate purposes.

On March 26, Service Corp. announced plans to sell $250 million in unsecured senior notes due 2016 via a Rule 144A transaction, which were subsequently priced to yield 6 ¾%.

On April 14, Service Corp. said that holders had tendered more than $200 million principal amount of the 6% notes - the amount the company was seeking to buy back from its holders - by the April 13 early tender deadline, and accordingly, it would accept notes for purchase on a pro rata basis.

Merrill Lynch & Co. was the dealer manager for the offer (888 654-8637 or collect at 212 449-4914). The information agent was Global Bondholder Services Corp. (866 873-7700; banks and brokerage firms call 212-430-3774).

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