Nebraska Book, parent fail to get consents from 8¾% and 10¾% debt holders

New York, Oct. 23 - Nebraska Book Co., Inc. (B3/B-) and its corporate parent, NBC Acquisition Corp. (Caa1/B-), said that their previously announced solicitation of investor consents to amending certain covenants and other provisions of the indenture for Nebraska Book's 8¾% senior subordinated notes due 2008 and NBC Acquisition's 10¾% senior discount debentures due 2009 expired as scheduled at 5 p.m. ET on Oct. 22, without further extension.

The companies said that as of that deadline, they did not receive did not receive the requisite consents of holders of the notes and the debentures and thus will not amend the provisions of the indentures as previously outlined.

As previously announced, Nebraska Book Co., an Omaha, Neb.-based college textbook wholesaler and college bookstore operator, and corporate parent NBC Acquisition said on Oct. 7 that Nebraska Book was soliciting noteholder consents to amend certain covenants and other provisions of the indenture for its 8¾% notes, while NBC Acquisition was soliciting consents to amend certain covenants and other provisions of the indenture for its 10¾% notes.

The companies initially announced that the twin consent solicitations would remain open until 5 p.m. ET on Oct. 17, although this was subsequently extended, most recently to Oct. 22.

They said that adoption of the proposed amendments would have required the consent of the holders of at least a majority in principal amount of the notes or the debentures, as applicable.

Had they received the requisite consents, Nebraska Book and NBC Acquisition had planned to each pay a consent fee of $25 per $1,000 principal amount of securities to noteholders or debenture holders, as applicable, who had delivered valid and unrevoked consents by the expiration deadline.

They said that the obligations of each company to pay consent fees would be subject to the satisfaction, on or before Jan. 2, 2004, of certain conditions described in the official consent solicitation statement.

As described in the official consent solicitation statements, Nebraska Book and NBC Acquisition proposed to undertake a series of transactions, including 1) the consent solicitations for each company; 2) entry into a new secured credit facility that is expected to consist of a $50 million revolving credit facility and a $110 million term loan facility; 3) the use of cash on hand and borrowings under the new senior credit facility by Nebraska Book to refinance all indebtedness under its existing credit facility, to pay a dividend to NBC Acquisition of $91 million and to pay fees and expenses related to the transactions; and 4) the use by NBC Acquisition of the proceeds from the $91 million dividend to purchase shares of its common stock and stock options totaling a maximum of $86 million and to pay fees and expenses related to the transactions.

The companies said that the proposed indenture amendments would have a) revised the Limitation on the Restricted Payments covenant in the indenture governing the 8¾% notes, to permit Nebraska Book to make the aforementioned dividend to NBC Acquisition, and in the indenture governing the 10¾% debentures, to permit NBC Acquisition to purchase shares of its common stock and stock options, as described above; and b) would have revised certain defined terms in each of the indentures to permit or facilitate the transactions.

Citigroup (call 212 723-6106 or toll free at 800 558-3745) and JPMorgan (212 270-9153) were the solicitation agents for the consent solicitations. Global Bondholder Services Corp. was the information agent and tabulation agent for each of the consent solicitations (212 430-3774 or 866-873-7700).

LNR buys back $51.7 million 10½% notes

New York, Oct. 23 - LNR Property Corp. said it bought back $51.7 million principal amount of its 10½% senior subordinated notes due 2009 on Oct. 21 and 22.

The repurchases are in addition to $79.9 million principal amount of the notes it bought on Oct. 14 and 15.

The Miami Beach, Fla. real estate investment and finance company previously announced a tender offer for all its outstanding 10½% notes and said it would redeem any remaining notes at their first call date on Jan. 15. But it added that it is seeking to acquire as many as possible of the 10½% notes before then in order to minimize interest costs.

The tender offer will expire at 5 p.m. ET on Nov. 13, subject to possible extension. Tendered notes may be withdrawn at any time until the expiration deadline.

LNR said it would repurchase the notes at a price equal to 106.892% of their principal amount, plus accrued interest up to, but not including, the payment date for the notes, which is expected to be on Nov. 14.

Deutsche Bank Securities is acting as dealer manager for the tender offer. U.S. Bank Trust NA will be the depositary to which tendered notes must be delivered by book-entry transfer through The Depositary Trust Co. MacKenzie Partners, Inc. is the information agent (800 322-2885).

Telex Communications begins exchange offer for 13% notes

New York, Oct. 23 - Telex Communications, Inc. (Ca) said that its newly formed Telex Communications Intermediate Holdings, LLC subsidiary is offering to exchange new 13% senior subordinated discount notes due 2009 for the company's existing 13% senior subordinated discount notes due 2006, as part of a refinancing of its existing debt.

Telex, a Minneapolis-based audio technology company, also said in its filing with the Securities and Exchange Commission that as part of the refinancing, the indenture governing the 2006 notes will be amended to delete substantially all of its covenants.

Further, Telex Newco Inc., a newly formed subsidiary of Telex Communications Intermediate Holdings which will be renamed Telex Communications, Inc., is offering $125 million principal amount of new five-year senior secured notes for sale, and substantially all of the assets and liabilities of the current Telex Communications will be contributed to Telex Newco, other than any of the 2006 notes which are not tendered in the exchange offer.

Dobson closes on credit facility, fulfills condition for 12¼% note, preferred stock tenders

New York, Oct. 23 - Dobson Communications Corp. (B3/CCC+) said that its wholly owned subsidiary, Dobson Cellular Systems, Inc., had closed on its new $700 million senior credit facility. Completion of the credit financing is a condition of both Dobson's previously announced cash tender offer for up to 250,000 shares of its 12¼% senior exchangeable preferred stock (Caa2), and for its Dobson/Sygnet Communications Co.(B3/B-) subsidiary's previously announced tender offer and related consent solicitation for Dobson/Sygnet's 12¼% senior notes due 2008.

The offer for the Dobson/Sygnet 12¼% notes was scheduled to expire at midnight ET on Oct 23, while the offer for the Dobson preferred stock was scheduled to expire at midnight ET on Oct. 30, with both tender offers subject to possible further extension.

As previously announced, Dobson, an Oklahoma City, Okla.-based provider of wireless communications services to mostly rural markets, said on Sept. 8 that its Dobson/Sygnet Communications Co. subsidiary had begun a cash tender offer for any and all of its outstanding $188.5 million of 12¼% notes, and was also soliciting noteholder consents to proposed indenture amendments.

It set a consent deadline of 5 p.m. ET on Sept. 12, and initially said the offer would expire at 5 p.m. ET on Oct. 7; the deadline was subsequently extended.

On Sept. 15, Dobson said that said that holders of the 12¼% notes had tendered a total of $183.255 million principal amount of the notes, or 97.2% of the total outstanding, as of the close of business on Sept. 12, which coincided with the now-expired consent deadline. That number did not change in several subsequent announcements that the tender offer had been extended, most recently on Oct. 22.

Dobson said that Dobson/Sygnet would pay noteholders who tendered prior to the consent solicitation expiration deadline aggregate consideration of $1,077.57 per $1,000 principal amount of notes tendered, which includes a $30 per $1,000 principal amount consent payment, and would also pay accrued and unpaid interest. Holders tendering after the consent deadline will receive $1,047.57 per $1,000 principal amount of notes, plus interest.

Dobson/Sygnet said it planned to execute a supplemental indenture that would, among other things, eliminate all events of default other than those relating to the failure to pay principal and interest on the notes. The amendments okayed by a clear majority of the noteholders would also eliminate covenants in the indenture that, among other things, have limited Dobson/Sygnet's ability to pay dividends, make distributions and certain investments, acquire or prepay junior securities, incur debt, sell assets, enter into certain transactions with affiliates and incur liens. The supplemental indenture will be operative upon consummation of the tender offer.

Dobson also said on Sept. 8 that it had begun a separate cash tender offer for up to 250,000 shares of its own 12¼% senior exchangeable preferred stock (Caa2), which, like the tender offer for the notes, was initially set to expire at 5 p.m. ET on Oct. 7 but was subsequently extended.

Dobson said it would offer cash consideration to tendering preferred stockholders of $1,061.25 per share, plus accrued and unpaid dividends up to, but not including, the settlement date, payable on the settlement date.

The company said that as of 12 midnight ET on Oct. 21, 245,842 of the preferred shares had been tendered - up slightly from the 245,832 preferred shares that had been tendered by 5 p.m. ET on Oct. 7.

The company said that the two offers would each be each subject to and conditioned upon Dobson Communications' receipt of proceeds from an offering of its debt securities and borrowings under a new senior credit facility or other financing.

(High yield syndicate sources said on Sept. 12 that Dobson had successfully sold an upsized $650 million of new 8 7/8% senior notes due 2013. Dobson had said that it would use the proceeds of the bond offering, along with those of the new $700 million credit facility to fund the $189 million note tender, the $250 million preferred stock tender and to refinance and replace outstanding borrowings under Dobson's existing credit facilities which totaled approximately $751 million as of June 30 Dobson said that it would contribute a portion of those proceeds to Dobson/Sygnet so that it can make payments pursuant to the Dobson/Sygnet tender offer).

The company said that the settlement date is expected to be promptly following the scheduled expiration date of the respective offers for the Dobson preferred shares and the Dobson/Sygnet senior notes.

Lehman Brothers Inc. is the dealer manager and solicitation agent for the offers (call collect at 212 528-7581 or toll-free at 800 438-3242). Documentation is available from Bondholder Communications Group, the offers' information agent (call 212 809-2663).

Advanced Medical Optics tendered for, redeemed notes in third quarter

New York, Oct. 23 - Advanced Medical Optics Inc. (B2/BB-) said in its third-quarter earnings filing with the Securities and Exchange Commission, that it had completed a tender offer for $115 million of its outstanding 9¼% senior subordinated notes due 2010 in July, as part of a recapitalization plan, and then retired an additional $15 million of the notes in September (out of the $200 million of the notes which were issued in June 2002).

The company gave no additional details about the September note retirement in terms of price, timing, etc.

As previously announced, Advanced Medical Optics, a Santa Ana, Calif.-based maker of ophthalmic surgical and eye care products, bought back the $115 million of 9¼% notes via modified Dutch auction tender offer which was announced on June 18 and which ended on July 18, with holders having tendered a total of $177.640 million principal amount of the notes. The company accepted for purchase a total of $115 million face value of the notes at a price of $1,150 per $1,000 principal amount, for a total purchase price of $132. 25 million, plus accrued and unpaid interest up to the payment date.

Advanced Medical partly funded the tender offer with a portion of a $140 million issue of new convertible notes, which was completed in June.

Volume Services America tenders for 11¼% notes

New York, Oct. 23 - Volume Services America, Inc. (B3/B-) said that it has begun a cash tender offer for all of the $100 million outstanding principal amount of its 11¼% senior subordinated notes due 2009 as well as a related solicitation of noteholder consents to proposed indenture changes.

The company set 5 p.m. ET on Nov. 6 as the early consent deadline and said the tender offer would expire at midnight ET on Nov. 21, with both deadlines subject to possible extension.

Volume Services America, a Spartanburg, S.C.-based provider of catering, concessions, merchandise and facilities management services for sports facilities, convention centers and other entertainment venues, said that it will pay tendering noteholders $1,062.79 per $1,000 principal amount of notes validly tendered and accepted for purchase, plus accrued and unpaid interest up to, but not including, the payment date.

In addition, noteholders who tender their notes and provide consents to the proposed amendments by the early consent deadline will receive an early consent premium of $20 per $1,000 principal amount.

Volume Services said that the tender offer would be subject to several conditions, including receipt by the company of valid and unrevoked consents from the holders of a majority in principal amount of the notes by the expiration deadline, and the consummation of an offering of Income Deposit Securities by Volume Services' parent company, Volume Services America Holdings, Inc.; the net proceeds of the Income Deposit Securities offer will be used to fund the tender for the 11¼% notes among other things.

The dealer manager for the tender offer is CIBC World Markets Corp. (contact Brian Perman at 212 885-4489). The information agent is Innisfree M&A Inc. (investors call toll-free at 888 750-5834, banks and brokerage firms call 212 750-5833).

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