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Aames extends exchange for convertibles
New York, June 14 - Aames Financial Corp. said it extended the exchange offer to refinance its outstanding 5.5% convertible subordinated debentures due 2006.
The offer will now expire at 5.00 p.m. ET on June 21, pushed back from 5.00 p.m. on June 13.
Aames said so far it has received tenders from holders of $42.7 million of the existing convertibles, 37.5% of the amount outstanding.
The company noted that it intends to complete the exchange offer unless an injunction is granted in a court case. Wilmington Trust Co., trustee for Aames' 9.125% senior notes due 2003, brought an action against the company seeking to prevent completion of the exchange. Oral arguments on a preliminary order were heard on June 10 in the Supreme Court of the State of New York. The court reserved decision pending consideration of the oral arguments and review of written submissions, Aames said.
The Los Angeles consumer finance company is offering holders $800 principal amount of new 4% convertible subordinated debentures due 2012 for each $1,000 principal amount of the existing securities. The new securities will be convertible at any time on the same terms as the old ones.
The new debentures will have a sinking fund, requiring Ames to redeem 30% of the outstanding principal amount on Dec. 15, 2002.
There will also be a change-of-control clause giving the company the option to redeem the convertibles. They will also be redeemable if Ames' 9.125% senior notes due 2003 are repaid in full or if the note indenture is modified to permit redemption.
Redemptions will be at 33.5% of the principal amount if ahead of the Dec. 15, 2002 sinking fund payment or 5% of their principal amount after that time.
Ames said the offer applies to all its existing $113.9 million of 5.5% convertibles. If all are tenders, it will issue $91.12 million of the new convertibles.
Ames said it reserves the right to set a minimum level for the tender to be completed.
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