Penske gets consents for 85% of 7¾% notes due 2016, modifies indenture

By Toni Weeks

San Diego, Aug. 28 - Penske Automotive Group, Inc. said that holders of about $317.7 million, or 85%, of the company's $375 million principal amount of 7¾% senior subordinated notes due 2016 validly tendered their notes prior to the early tender deadline, 5 p.m. ET on Aug. 27.

Because the company received consents from more than a majority of the outstanding notes, it has executed a supplemental indenture to eliminate substantially all of the restrictive covenants and some event-of-default provisions contained in the indenture governing the notes.

The company previously said it needed consents from a majority of the outstanding notes to execute the supplemental indenture and that the offer was not conditioned on a minimum tender amount but on the completion of the company's proposed offering of senior subordinated notes. Penske closed a $550 million offering of 5¾% senior subordinated notes on Tuesday.

In the offer, holders could not tender their notes without delivering their consents and could not deliver their consents without tendering their notes.

Holders who validly tendered their notes prior to the early deadline will receive $1,042.50 per $1,000 principal amount of notes. The total payment includes a premium of $10.00 per $1,000 of notes.

Those who tender after the early date will receive the base payment of $1,032.50 per $1,000 of notes.

The company will also pay accrued interest up to but excluding settlement, which will occur promptly after the early tender date for notes tendered by that time and after the offer expires for the remaining tenders, according to a previous press release.

The offer will end at midnight ET on Sept. 11.

Penske also announced it will redeem any notes that remain outstanding after the tender offer is completed. The redemption price will be 103.875 plus accrued interest up to but excluding Sept. 27 and will be financed with proceeds of the 5¾% senior notes offering.

Bank of America Merrill Lynch (888 292-0070 or collect 646 855-3401) is the dealer manager. Georgeson Inc. (800 561-3991 or, for banks and brokers, 212 440-9800) is the information agent. Bank of New York Mellon Trust Co., NA is the depositary.

Penske is a Bloomfield Hills, Mich.-based automotive retailer.

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