Georgia Gulf completes tender offer for 10 3/8% notes

New York, Dec. 3 - Georgia Gulf Corp. (B1/BB-) said that it had accepted for payment all of its 10 3/8% senior subordinated notes due 2007 that were tendered under the company's previously announced tender offer and consent solicitation, which expired as scheduled at midnight ET on Dec. 2.

As of that deadline, holders of approximately 66% of the $200 million outstanding principal amount of the notes had tendered their notes and had consented to amendments to the related indenture, which have now become effective. The company paid a total of about $140 million in principal, interest, tender premium and related costs.

Georgia Gulf funded the tender offer - and will also fund the upcoming redemption of all of the remaining 10 3/8% notes which were not tendered in the tender offer - using funds from a variety of sources, including a new $200 million seven-year term loan, an increase in the availability under its revolving credit facility to $120 million from $100 million, the proceeds of its Nov. 19 sale of $100 million of new 7 1/8% senior notes due 2013 and a $25 million increase in the company's receivables securitization program.

Concurrently with its announcement of the completion of the tender offer, Georgia Gulf also announced that it had entered into a credit facility amendment providing for the new term loan and the increased revolver borrowing, and that it had closed on the sale of the new 7 1/8% notes, and also said that some of the proceeds were used to used to repay the $134 million existing term loan under the senior credit facility, which had a scheduled maturity of 2007.

As previously announced, Georgia Gulf, , an Atlanta-based chemical company, said on Nov. 3 that it had begun a tender offer for any and all of its $200 million outstanding principal amount of the 10 3/8% notes and was also soliciting noteholder consents to certain proposed indenture amendments.

Georgia Gulf set a consent deadline of 5 p.m. ET on Nov. 17, and an expiration deadline of midnight ET on Dec. 2, both now expired.

It said the purchase price of $1,033.13 would be paid per $1,000 principal amount of notes validly tendered and accepted for purchase, as well as accrued and unpaid interest up to, but not including, the payment date. In addition, noteholders tendering their notes by the consent deadline (and thus providing their consent to the indenture changes) would receive a consent payment of $20 per $1,000 principal amount, for total consideration of $1053.13 per $1,000 principal amount of notes tendered.

The company said noteholders tendering their notes would be required to consent to the proposed amendments, and noteholders could not deliver consents to the proposed amendments without tendering their notes in the tender offer.

Georgia Gulf said its obligations to accept for purchase and to pay for notes in the tender offer would be conditioned on, among other things, the company having received valid tenders representing a majority in aggregate principal amount of the outstanding notes, and those tenders not being subsequently withdrawn; execution of a supplemental indenture to the notes' indenture following receipt of consents to the proposed amendments from the holders at least a majority of the outstanding notes; receipt by the company of consent to the tender offer and consent solicitation from its bank lenders under the company's credit agreement; and its receipt of sufficient funding to pay for the tender offer and consent solicitation from one or more financings, including new bank financing.

On Nov. 17, Georgia Gulf said it had received the necessary amount of tenders and related consents under terms of the offer and solicitation, with holders of 66% of the principal amount of the notes having tendered them and having consented to the indenture amendments by the now-expired consent deadline of 5 p.m. ET on Nov. 17. Georgia Gulf said it had executed a supplemental indenture to put the amendments into effect, but said the indenture changes would not become operative until the notes tendered were accepted for payment.

On Nov. 21, the company said that it would redeem all remaining 10 3/8% notes not tendered by the previously announced consent solicitation period, or $68.175 million principal amount of the notes.

It said that it would redeem the notes at 105.188% of the principal amount plus accrued interest on Dec. 21.

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