Equinix makes exchange offer for 13% '07 notes

Equinix, Inc. said Tuesday (Nov. 26) that it is offering to exchange cash and common stock for all $147.2 million of its 13% senior notes due 2007 that remain outstanding (out of the originally issued $200 million, which was reduced to present levels by earlier equity-for-debt exchanges).

The company said that it has already received offers to exchange from holders of $103.7 million of the notes, or approximately 70% of the notes currently outstanding. It did not publicly announce the terms of the exchange offer, which were contained in the official Offer to Exchange and Consent Solicitation Statement delivered to the noteholders. It said that the amount of cash to be exchanged and the amount of common stock shares to be issued in exchange for each principal amount of notes tendered will vary, depending on the aggregate principal amount of the notes that are tendered.

The tender offer will expire at 5 p.m. ET on Dec. 24, subject to possible extension. Tenders of notes may be withdrawn at any time prior to the deadline. Morrow & Co. (call 800 607-0088) is the Information Agent for the exchange offer.

Equinix further said that as a result of the tender offer, it does not intend to pay the scheduled Dec. 1 interest payment on the outstanding notes. The company said that its bondholders and senior lenders continue to work with Equinix to afford it sufficient time and flexibility to effect the proposed acquisitions and financing as announced on Oct. 2.

AS PREVIOUSLY ANNOUNCED, Equinix, a Mountainview, Calif.-based provider of core Internet exchange services, said on March 7 that it had retired $25 million of the 13% notes in exchange for approximately nine million shares of common stock. The company said the retirement of these notes would result in an annual savings of approximately $3.25 million in interest expense, which would be realized over the full year beginning in fiscal 2002. As of the date of that release, Equinix said it had reduced its interest payments on the retired senior notes beginning January, 2002 through December, 2007 by $19.5 million. Together with the $25 million in principal payments that would otherwise have come due in December 2007, Equinix said it had reduced its debt service on the retired senior notes by nearly $45 million. With the transfer of the nine million shares to the former holders of the $25 million of retired notes, the total number of common stock shares outstanding upon completion of the exchange was approximately 89 million shares.

On June 12, Equinix said that it had retired an additional $10 million of the 13% notes; including the $42 million of senior notes which were retired in debt exchanges in the first half of 2002, that brought the total face amount of the notes which had been retired at significant discounts as of that date to $52 million. The company said that since October, 2001, it had reduced its total outstanding debt by $97 million, including the retirement of $45 million in senior credit facility debt in October, 2001. The debt reductions reduced the company's annual interest expense by nearly $10 million, with the company's total debt obligations, including principal and interest over the term of the debt, to be reduced by approximately $150 million.

Equinix additionally announced the filing of a proxy statement with the Securities and Exchange Commission calling for a special stockholders' meeting to approve the potential issuance of up to 15 million shares of common stock in exchange for the retirement of additional senior notes. The total number of common stock shares outstanding as of the date of that announcement was 96.9 million shares. Equinix said that the ability to issue additional common shares would give it greater flexibility and options to de-leverage the company. While Equinix said it did not expect to transact any additional debt-for-equity exchanges in the near term at the then-current stock trading level, the availability of additional authorized shares would enable the company to take advantage of favorable debt-for-equity exchange opportunities as market conditions improved.

Atlantis Plastics redeeming 11% '03 notes

Atlantis Plastics, Inc. said on Tuesday (Nov. 26) that it has s delivered a redemption notice to the holders of all of its $49 million of outstanding 11% senior notes due 2003. It will redeem the notes at 100% of the principal amount, plus accrued interest, on or about Dec. 26.

Atlantis, an Atlanta-based manufacturer of polyethylene stretch and custom films and molded plastic products, also announced that it has engaged GE Commercial Finance and CIBC World Markets Corp. as co-lead arrangers of a new senior debt financing of approximately $110 million, with the proceeds slated to be used for the retirement of the 11% notes, the refinancing of other indebtedness and future working capital needs. It anticipates that the financing, which will include GE Commercial Finance, CIBC and others, shall be in place on or about Dec. 26.

Sirius Satellite slates stock-for-debt exchange

Sirius Satellite Radio Inc. said in an S-4 filing with the Securities and Exchange Commission on Nov. 20 that it will offer to exchange new shares of common stock for existing high yield bond debt, convertible debt and bank debt, will solicit noteholder consents to proposed indenture changes related to its overall recapitalization plan. The company will additionally solicit debtholder acceptances to a proposed pre-packaged plan of reorganization - something which the company describes as "a fall-back position should it fail to convert the required number of bondholders during the recapitalization process." If the company decides to go that route, the pre-packaged plan would effect the same transactions contemplated by the recapitalization plan, including the issuance of common stock in exchange for the company's debt securities and preferred stock, as well as proposed new equity investment.

Sirius, a New York-based satellite radio broadcasting company, said it will offer a total of 596,669,765 common shares (representing approximately 62% of its outstanding common stock after giving effect to the restructuring) for the debt as a part of the overall recapitalization plan. It will offer the stock in exchange for its $280.43 million (face amount at maturity) of outstanding 15% senior secured discount notes due 2007, its $200 million of outstanding 14½% senior secured notes due 2009, its $16.461 million of outstanding 8¾% convertible subordinated notes due 2009, $150 million of Lehman Senior Term Loans and $50 million of Loral Senior Term Loans.

The company said that each holder of its debt securities would receive 779.5 shares of common stock per $1,000 of principal and accrued interest exchanged. Including accrued interest through March 15, 2003, current holders of the 15% discount notes would hold 23.7% of Sirius' common stock after the completion of the recapitalization, assuming 100% participation of holders of those notes; holders of the 14½% notes would hold 18.2% of the stock; holders of the 8¾% convertible notes would hold 1.4% of the stock; holders of the Lehman loans would hold 12.6% of the stock; and holders of the Loral loans would hold 6.1% of the stock, for an aggregate of 62% of the stock which will then be outstanding.

Concurrent with the consummation of the exchange offer, Sirius' outstanding preferred stock will be exchanged for common stock and certain investors will purchase common stock for $200 million cash. Sirius said that the restructuring will eliminate all or substantially all of its outstanding debt and all of its preferred stock and provide the company with sufficient cash to cover its estimated funding needs into the second quarter of 2004.

In connection with the exchange offer, Sirius is also soliciting the consent of its noteholders to the adoption of certain amendments to the notes' indentures and the waiver of any defaults or events of default under such indentures now in existence, if any, or caused by the recapitalization plan. Consents from holders of a majority of the principal amount for each series of notes (principal amount at maturity for the discount notes) are necessary to effect the proposed amendments and waivers.

It said that under terms of its lockup agreement, holders of approximately 53% of the outstanding principal amount at maturity of its outstanding senior secured discount notes, approximately 60% of its outstanding senior secured notes and approximately 53% of its outstanding convertible subordinated notes have agreed to tender their notes in the exchange offer and consent to the proposed amendments and waivers, thereby assuring that the proposed amendments and waivers will become effective in the event the exchange offer is completed.

Sirius said that if the recapitalization plan is completed and supplemental indentures are executed, the proposed amendments and waivers will be binding upon non-tendering holders of notes, regardless of whether such holders consented to the proposed amendments and waivers.

Delivery of a properly completed and validly executed letter of transmittal will constitute delivery of a consent. Holders cannot tender notes in the exchange offer unless they also consent to the proposed indenture amendments and waivers.

Completion of the exchange offer is conditioned, among other conditions, upon the company's receipt of valid tenders from at least 97% in aggregate principal amount of its outstanding debt securities and 90% in aggregate principal amount of its convertible subordinated notes; provided that the holders of a majority of its debt securities may reduce the minimum tender condition to not less than 90% in aggregate principal amount of Sirius debt securities and may lower or eliminate the minimum condition applicable to its convertible subordinated notes.

Completion of the exchange offer is also conditioned upon the approval by its existing stockholders of the restructuring and receipt of any required consents or approvals from governmental authorities.

Sirius did not initially set an expiration deadline for the exchange offer. It said that the exchange offer would begin as soon as possible after the effective date of the registration Statement filed with the SEC. It expects to have the restructuring and recapitalization process completed no later than March 15, 2003.

UBS Warburg will be the dealer manager for the exchange offer.

Interpool completes tender for 6 5/8% '03 notes

Interpool, Inc. said on Nov. 18 that a total of $33.1 million principal amount of its outstanding 6 5/8% notes due 2003 had been validly tendered to the company under its previously announced tender offer for the notes, which expired as scheduled at 5 p.m. ET on Nov. 15 with no extension. Interpool accepted for payment all validly tendered notes.

The Altman Group (call 800 206-0007) was the information agent for the tender offer.

AS PREVIOUSLY ANNOUNCED, Interpool, a Princeton, N.J. container and transportation equipment leasing company, said on Sept. 20 in a filing with the Securities and Exchange Commission that it had retired $5.205 million of its 6 5/8% notes during the second quarter of 2002, leaving $42.421 million outstanding as of June 30. It recognized an extraordinary gain of $19,000 net of tax expense of $13,000 from the transaction. It previously retired $17 million of the notes in the fourth quarter of 1999, $8.2 million in the first quarter of 2000 and $27.2 million in the second and third quarters of 2001.

On Oct. 16, Interpool said that it had begun a tender offer for any and all of the approximately $41 million of remaining outstanding 6 5/8% notes (out of the $100 million originally issued in February 1998). It said the tender offer would expire at 5 p.m. ET on Nov. 15, subject to possible extension. The company said that total consideration to be offered in the tender offer would be par value - $1,000 per $1,000 principal amount of the notes - plus accrued and unpaid interest. The company plans to pay for the tender offer out of cash on hand.

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