Grupo Gigante accepts tenders for 91.4% of 8¾% notes

By Jennifer Chiou

New York, Dec. 31 - Grupo Gigante, SAB de CV said it accepted tenders from holders of $237.58 million, or 91.4%, of its $260 million of 8¾% senior notes due 2016.

The tender offer expired at 8 a.m. ET on Dec. 27.

The company began the tender offer and a consent solicitation for the notes on Nov. 28. The consent deadline was 5 p.m. ET on Dec. 11.

Gigante said it paid $1,146.84 for each $1,000 principal amount of notes tendered.

The payout was determined at 10 a.m. ET on Dec. 24 and equals the sum of 35% of the equity clawback price - which is $1,087.50 - plus 65% of the fixed spread price, as defined below. The reference yield was 3.385% for the notes.

The fixed spread price for each $1,000 principal amount of the notes equaled the present value on the settlement date of $1,043.75 - which is the redemption price payable for the notes on April 13, 2011 - and the present value of interest to April 13, 2011, discounted using a yield to April 13, 2011 equal to the sum of the reference yield on the 4 7/8% Treasury note due April 30, 2011, plus 75 basis points, minus accrued interest up to but excluding the settlement date.

The payout included a $20.00 consent fee for each note tendered by the consent deadline, and all noteholders also received accrued interest up to but excluding the settlement date of Dec. 28.

Holders who tendered their notes were required to grant consents and vice versa.

As of Dec. 12, Gigante had received consents and tenders from holders of $232.5 million, or 89%, of the $260 million of notes.

The consents allowed the company to amend the note indenture to eliminate or modify substantially all the covenants and some events of default and to modify the provisions relating to defeasance of the notes.

The amendments became operative when the tendered notes were accepted for payment.

The tender offer was originally conditioned on the consummation of a proposed transaction between Gigante and Tiendas Soriana SA de CV, but this condition has been waived because the transaction has not yet been consummated.

Citi (800 558-3745 or 212 723-6108) was the dealer manager, and Global Bondholder Services Corp. (866 794-2200) was the information agent.

Gigante is a food retailer based in Mexico City.

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