Howard Hughes wraps tender offer, redeems remaining 6 7/8% notes

By Marisa Wong

Morgantown, W.Va., March 30 – Howard Hughes Corp. announced the expiration of its tender offer for any and all of its 6 7/8% senior notes due 2021 and the related consent solicitation that began on March 2.

The company said it has redeemed all $158.3 million of outstanding notes not tendered in the offer at 105.156 plus accrued interest to March 30. The company used some of the proceeds from its offering of $800 million 5 3/8% senior notes due 2025 to fund the redemption.

As previously announced, the company received tenders from holders of about $591.7 million, or 79%, of its $750 million of outstanding 6 7/8% notes by the early consent deadline at 5 p.m. ET on March 15. Those notes were accepted for purchase on March 16.

No additional notes were tendered after March 15, according to Thursday’s announcement.

Howard Hughes paid a total of about $642.2 million to settle the tenders received by the consent deadline, also using proceeds from the new 5 3/8% notes.

The company paid a total purchase price of $1,053.75 per $1,000 principal amount for the notes tendered by the consent deadline. The total price included a consent payment of $30 per $1,000 of notes.

Holders tendering after the consent deadline would have been eligible to receive $1,023.75 per $1,000 of notes.

The company also paid accrued interest up to but excluding the settlement date.

Holders who tendered their notes were deemed to consent to the proposed amendments, and holders could not deliver consents without tendering their notes.

The amount of notes tendered by the early deadline was sufficient for Howard Hughes to amend the note indenture to eliminate substantially all of the restrictive covenants and some events of default, as well as to reduce the redemption notice period. A supplemental indenture was executed to effect those changes, according to a prior press release.

The tender offer and consent solicitation ended at 11:59 p.m. ET on March 29.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the dealer managers and solicitation agents. D.F. King & Co., Inc. (888 887-1266) is the tender agent and information agent.

Howard Hughes is a Dallas-based property developer.

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