Tommy Hilfiger U.S.A. extends consent solicitation for 6.85% notes, increases payment

By Angela McDaniels

Seattle, April 24 - Tommy Hilfiger U.S.A. Inc. said it extended the consent solicitation to amend the indenture governing its $192.47 million 6.85% notes due 2008 to 5 p.m. ET on May 9 from April 21 and extended the tender offer for the notes to 5 p.m. ET on May 9 from May 5.

The company also increased the consideration to be paid for 6.85% notes tendered to the sum of the present value of scheduled payments until June 1, 2008, the maturity date, discounted using the yield to maturity of the 3.25% U.S. Treasury note due Aug. 15, 2008 and 25 basis points.

Previously, the spread was 50 basis points. The consideration will be priced at 2 p.m. ET on April 28.

The consent deadline for the company's $150 million 9% senior bonds due 2031 remains 5 p.m. ET on May 5, and the payment for the 9% bonds remains $25.25 per $25 principal amount.

Noteholders and bondholders will also receive accrued interest up to but excluding the settlement date.

The payouts include a consent payment of $0.25 for the 9% bonds and $20 for the 6.85% notes for those who tender before the consent deadline.

The proposed amendments would eliminate the restrictive covenants, including those relating to limitations on the company's liens and debt, and certain related events of default.

Holders of $79.823 million, or 41.47%, of the 6.85% notes had tendered and submitted consents as of April 21 and holders of $55.66 million, or 37.1%, of the 9% bonds had tendered and submitted consents as of April 20, according to a company news release.

Citigroup Corporate and Investment Banking (212 723-6106 or 800 558-3745) is dealer manager, and Global Bondholder Services Corp. is information agent (212 430-3774 or 866 389-1500).

The tender offers and the consent solicitations are being conducted in connection with parent company Tommy Hilfiger Corp.'s agreement to merge with Apax Partners.

The company said it has scheduled a special meeting of shareholders for May 9 to vote on and approve the merger.

Apax has irrevocably waived the closing condition that the debt tender offers be consummated and consents be obtained from a majority of holders before the merger, provided that if such consents are not obtained for the 9% bonds, Tommy Hilfiger U.S.A. will effect a covenant defeasance of the 9% bonds.

The tender offers are conditioned upon receipt of the applicable debt financing and execution and delivery of the supplemental indenture for the 9% bonds or prior to or concurrently with the closing of the merger.

New York-based Tommy Hilfiger U.S.A. is a wholly owned subsidiary of Tommy Hilfiger Corp., a Hong Kong-based clothing company.

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