Fleetwood holders may exchange 5% convertibles for notes due 2011

By Susanna Moon

Chicago, Nov. 25 - Fleetwood Enterprises, Inc. said holders of its 5% convertible notes may participate in the company's previously announced exchange offer for new senior secured notes due 2011 along with up to 14 million common shares in lieu of puting their notes for common stock.

The company said on Nov. 6 that it exercised its option to pay the Dec. 15 put option for its $100 million 5% convertible senior subordinated debentures due 2023 in shares of common stock.

The exchange offer will be finalized in December. The new notes are partially secured and guaranteed by certain Fleetwood subsidiaries.

Provided that the exchange is completed by Dec. 12, the largest individual debenture holder, which accounts for 34% of the existing debentures, plans to exchange for the new notes, according to the company's news release for the quarter ended Oct. 26.

This would be sufficient to meet the minimum acceptance threshold for the exchange, the company noted.

For the holders who do not accept the exchange offer, the company will fulfill any repurchase requests with common stock.

"We remain optimistic that the debenture holders will accept the exchange offer, which we believe is in their best interests as well as the company's," Smith said. "Resolution of this matter in combination with our aggressive restructuring plan will benefit everyone who has a vested interest in Fleetwood, including dealers, retail customers, suppliers, and shareholders, as well as our debt holders."

As previously noted, for each $1,000 principal amount of convertibles, holders who put will receive a number of shares equal to the quotient of $1,000 divided by 95% of the market price of one share. The market price will be the average of the volume-weighted average prices of the common stock for each of the 20 trading days beginning on Nov. 14 and ending on Dec. 12.

Holders will also receive accrued interest up to but excluding Dec. 15 in the amount of $25 per $1,000 principal amount, according to a company news release.

The exchange offer expires at 5 p.m. ET on Dec. 5.

In order to put convertibles for repurchase, a repurchase notice must be returned to Bank of New York Mellon Trust Co., NA, as paying agent, by 5 p.m. ET on Dec. 15.

Investors who hold their convertibles through Depository Trust Co. should comply with the automated tender offer program procedures of DTC, the release noted.

MacKenzie Partners, Inc. (800 322-2885) is the information agent.

Fleetwood is based in Riverside, Calif., and produces recreational vehicles and manufactured homes through its subsidiaries.

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