Dixons tenders for £80 million of 6 1/8% notes, £50 million 8¾% notes

By Susanna Moon

Chicago, Sept. 10 - Dixons Retail plc said it began a cash tender offer for up to £80 million of its outstanding £300 million of 6 1/8% guaranteed bonds due 2012 and up to £50 million of its outstanding £150 million of 8¾% guaranteed notes due 2015.

The total purchase price will be £1,004 per £1,000 of 6 1/8% notes and £1,050 per £1,000 of 8¾% notes tendered by 11 a.m. ET on Sept. 17.

Holders also will receive accrued interest.

Settlement is slated for Sept. 20.

Funding for the offer to repurchase the company's £160 million of outstanding 6 1/8% notes will come from existing cash, whereas the company will repurchase the 8¾% notes with proceeds from a new issue of notes.

The company said it plans to issue new sterling-denominated fixed-rate guaranteed notes due in 2017 to institutional investors.

The offer for the 8¾% notes is intended to extend the company's debt maturity profile and to increase overall group liquidity; the offer for the 6 1/8% notes is meant to use cash balances efficiently, according to a company press release.

The offer for the 8¾% notes is conditioned on completion of the new issue.

If the amount of notes tendered exceeds the offer cap of each series, the notes will be purchased on a prorated basis.

The Royal Bank of Scotland plc (+44 20 7085 4634, attn.: liability management group, email: liabilitymanagement@rbs.com), HSBC Bank plc (+44 20 7992 6237, attn.: liability management group, email: liability.management@hsbcib.com), Citigroup Global Markets Ltd. (+44 20 7986 8969, attn: liability management group, email: liabilitymanagement.europe@citi.com), BNP Paribas (+44 20 7595 8668, attn.: Liability Management Group, email: liability.management@bnpparibas.com) and Barclays Bank plc (+44 20 7773 8990, attn.: liability management group, email: eu.lm@barclays.com) are the dealer managers and bookrunners.

Lucid Issuer Services Ltd. (+44 20 7704 0880, attn: Paul Kamminga/David Shilson, email: dsg@lucid-is.com) is the tender agent.

Dixons is a specialist electrical retailer and services company based in Hemel Hempstead, England.

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