Education Management starts cash tender offer for 8¾%, 10¼% notes

New York, Sept. 21 - Education Management LLC said it has begun a cash tender offer for its 8¾% senior notes due 2014 and 10¼% senior subordinated notes due 2016.

The company will pay up to $323.9 million in the offer, including the amount to be paid for the notes and accrued interest.

The $385 million of 10¼% notes have first priority. Education Management is offering $1,110 per $1,000 principal amount, including a $30 early tender premium.

For the $375 million of 8¾% notes, the company will pay $1,070 per $1,000 principal amount, again including a $30 early tender premium.

Holders must tender by 5 p.m. ET on Oct. 5 to receive the full amount. After that date, they will not be paid the early tender premium.

The offer expires at 5 p.m. ET on Oct. 19.

Education Management will also pay accrued interest up to but excluding the settlement date.

There is no minimum for the offer.

However, completion of the tender is subject to Education Management Corp. completing its planned initial public offering.

Goldman, Sachs & Co. (212 357-4692 or 800 828-3182, attention: Liability Management Group) and J.P. Morgan Securities Inc. (800 245-8812, attention: High Yield Syndicate) are dealer managers. Global Bondholder Services Corp. is the information agent and depositary (banks and brokers call 212 430-3774, others 866 387-1500).

Education Management is a Pittsburgh-based provider of post-secondary education.

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