99 Cents extends early deadline for exchange offer, ups consideration

By Marisa Wong

Morgantown, W.Va., Nov. 22 – 99 Cents Only Stores LLC extended the early tender date, increased the consideration and amended some other terms under its previously announced exchange offer, according to a Wednesday press release.

On Nov. 7 the company launched an offer to exchange its $250 million of 11% senior notes due 2019 for new 13% cash/PIK notes due 2023 or new 13% all PIK notes due 2023. The company also launched a consent solicitation to amend the indenture of the 11% notes.

On Wednesday, the company shortened the maturity date of its newly issued 13% cash/PIK notes being offered in exchange for the existing notes. The maturity date is now April 14, 2022 instead of June 15, 2023. The company said it also amended some other terms of the new notes.

The company extended the early tender date to 5 p.m. ET on Nov. 30 from 5 p.m. ET on Nov. 22.

The issuer also increased the early tender consideration by adding to it $7.50 in cash, in addition to the early tender consideration of $30 in principal amount of new notes per $1,000 of existing notes.

In addition, 99 Cents amended the conditions to the exchange offer to include a minimum tender condition that at least 95% of the existing notes be tendered by the expiration of the offer.

The company also announced that it has amended the consideration being offered in exchange for the existing notes held by affiliates of its controlling equityholders. The consideration was changed from its 13% all PIK notes due 2023 to shares of new paid in-kind series A-1 preferred stock of Number Holdings, Inc., the direct parent of 99 Cents, with an aggregate liquidation preference of $1,000 per share and $7.50 in additional aggregate liquidation preference of new preferred stock if tendered by the early tender date and an aggregate liquidation preference of $970 per share if issued after that.

The offer expires at 11:59 p.m. ET on Dec. 7. Settlement is expected to follow promptly after the expiration.

The new notes are being issued under Rule 144A and Regulation S.

The new notes will be secured by a perfected security interest on substantially all of the company’s and each guarantor’s tangible and intangible assets and the equity interests issued by the company’s direct and indirect wholly owned subsidiaries, as previously noted.

The new secured notes will be effectively senior to all of the company’s existing and future unsecured debt, including the existing notes.

Details on the consent solicitation were not disclosed in the original release.

D.F. King & Co., Inc. (877 297-1747 or 212 269-5550) is the information agent for the exchange offer.

99 Cents is a City of Commerce, Calif.-based operator of extreme value stores.

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