Iron Mountain completes tender offer for 9 1/8% '07 notes

Iron Mountain Inc. (B2/B) said on Wednesday (Jan. 15) that it had completed its previously announced tender offer for its outstanding 9 1/8% senior subordinated notes due 2007 and the related consent solicitation, which expired as scheduled at 12 midnight ET on Tuesday (Jan. 14) without extension.

As of the expiration deadline, Iron Mountain had received tenders from the holders of $52 million of the notes, or approximately 69%, of the aggregate outstanding principal amount, leaving $23.2 million untendered and still outstanding.

The company said that it had previously announced that it has called all remaining outstanding notes for redemption in accordance with the notes' indenture.

Bear, Stearns & Co. Inc. (contact the Global Liability Management Group toll-free at 877 696-2327) was the exclusive dealer manager and solicitation agent in connection with the tender offer and consent solicitation. D.F. King & Co., Inc. (call toll-free at 800 488-8075) was the information agent for the tender offer and consent solicitation.

AS PREVIOUSLY ANNOUNCED: Iron Mountain, a Boston-based records and document storage company, said in its 10-Q quarterly filing with the Securities and Exchange Commission on Nov. 12 that it had completed an offer to exchange new 8 5/8% notes for its outstanding 9 1/8% notes on Nov. 8. The notes were swapped at an exchange ratio of 1.0237, resulting in the issuance of $45.9 million in face value of 8 5/8% notes and the retirement of $44.8 million of the 9 1/8% notes.

The company said the non-cash debt exchange would result in carryover basis and, therefore, no gain or loss on extinguishment of debt.

On Dec. 16, Iron Mountain said that it had begun a cash tender offer and consent solicitation for all $75.19 million principal amount of the 9 1/8% notes which had remained outstanding (following the previously announced debt exchange offer), and was also soliciting noteholder consents to proposed indenture changes that would eliminate certain restrictive covenants and amend the timing required for effecting a Notice of Redemption.

The company said the tender offer would expire at 12 midnight ET on Jan. 14, while the consent solicitation portion of the offer would expire at 5 p.m. ET on Dec. 30, with both deadlines subject to possible extension. It said that holders tendering their notes would be required to consent to the proposed indenture amendments, and could not deliver consents to the indenture changes without also tendering their notes.

Iron Mountain said that noteholders validly tendering their notes and delivering the related consents by the consent deadline would receive total consideration of $1,045.63 per $1,000 principal amount of notes tendered, including a $30 per $1,000 principal amount consent payment. Iron Mountain said it expected to pay the total consideration promptly after the consent date for notes that are validly tendered on or prior to the consent date and accepted for purchase.

It said that holders validly tendering their notes after the consent date and prior to the expiration date would not be entitled to the consent payment, and would receive the total consideration minus the consent payment as their consideration. Iron Mountain said it expected to make payment on those notes validly tendered after the consent deadline but before the tender offer expiration deadline and accepted for purchase promptly after the offer expires. All holders validly tendering their notes any time before the expiration would also be paid accrued and unpaid interest up to, but not including, the payment date for the notes.

Iron Mountain said it would finance the tender offer and consent solicitation with a portion of the net proceeds from an offering of $100 million of new senior subordinated notes due 2015 (The company separately announced later in the day on Dec. 16 that it had sold $100 million of 7¾% notes at par to realize total proceeds of $98.4 million after underwriting costs).It said completion of this financing would be one of the conditions to Iron Mountain's obligations to accept notes for payment.

On Dec. 31, Iron Mountain said that it had received through its depositary and had accepted tenders and consents representing approximately 69% of the $75.2 million aggregate principal amount of its outstanding 9 1/8% notes under its tender offer and consent solicitation.

Receipt of the tenders and consents by the previously announced consent deadline of 5 p.m. ET on Dec. 30 enabled the company to amend the timing required for effecting a Notice of Redemption and to eliminate or modify certain covenants and related provisions in the Indenture governing the notes.

Iron Mountain and the notes' trustee executed a supplemental indenture containing the desired indenture amendments, which were to become operative immediately. Iron Mountain said it expected to pay for all notes validly tendered by the consent deadline on Dec. 31.

XM Satellite Radio gets GM, investor OK to cut 14% '10 notes exchange participation threshold

XM Satellite Radio Holdings Inc. said on Wednesday (Jan. 15) that has received the necessary consents from an investor group and from General Motors Corp. (which together are providing $450 million in new financial investment and support) to lowering the minimum participation threshold for its related previously announced offer to exchange new debt, cash and equity warrants for its outstanding 14% senior secured notes due 2010.

XM said that the investor group and GM had okayed lowering the minimum participation level to 75% from the originally announced 90%.

XM additionally said that it has amended the exchange offer to further reduce the minimum participation condition to 50.1%. However, as described above, the General Motors and investor group financing transactions are currently conditioned upon 75% participation by existing noteholders in the exchange offer, and XM said it will close on the exchange offer only if the minimum participation condition to the financing transactions is satisfied or waived, which would require agreement by GM and two-thirds of the investor group.

XM said that all other terms and conditions of the existing exchange offer and consent solicitation remain unaffected by the change.

Bank of New York is the depositary for the tender offer. D.F. King Inc. is the information agent.

AS PREVIOUSLY ANNOUNCED, XM Satellite Radio, a Washington D.C.-based satellite radio broadcaster, said on Dec. 23 that it had agreed to enter into financing transactions totaling $450 million aimed at improving its liquidity. These would include a $200 million equity investment by a group on investors and $250 million of payment arrangements and credit facilities with General Motors. XM also said at that time that it planned to exchange new notes, cash and warrants for up to 90% of the existing 14% notes, but gave no further details of the proposed exchange offer at that time.

On Dec. 24, XM formally announced that it was beginning the pr eviously announced exchange offer and consent solicitation under which the company would seek to exchange a package of new notes, cash and common stock warrants for at least 90% of its $325 million of outstanding 14% senior secured notes due March 15, 2010.

The company said the exchange offer would expire at 12 midnight ET on Jan. 23, subject to possible extension.

XM said it was offering up to $474.2 million (aggregate principal amount; $325 million accreted value) of its new 14% senior secured discount notes due Dec. 31, 2009, plus up to $22.75 million in cash and warrants to purchase up to 27.625 million shares of XM's Class A common stock at $3.18 per share.

On an individual basis, the consideration breaks down to a package consisting of $1,459 principal amount at maturity ($1,000 accreted value as of March 15, 2003) of XM's new 14% senior secured discount notes due Dec. 31, 2009, plus $70 in cash, and a warrant to purchase 85 shares of XM's Class A common stock at $3.18 per share, per $1,000 principal amount of existing notes tendered.

The company said the new notes would accrete interest until Dec. 31, 2005, after which time XM would make semi-annual cash interest payments beginning on June 30, 2006. The new notes would be secured by substantially all of the company's assets (excluding real property), in contrast to the security for the existing notes, which is limited to the capital stock of XM's FCC license subsidiary.

XM also said that it would solicit consents to amend the existing notes' indenture to, among other things, eliminate or substantially amend all of the restrictive covenants, other than covenants requiring payment of interest on the notes and principal, when due. It said that noteholders could not deliver consents without tendering existing notes in the exchange offer.

The company said that financing transactions concurrently announced with the exchange offer would be contingent upon, among other things, 90% participation by existing noteholders in the exchange offer, although XM reserved the right to waive that requirement with the consent of General Motors and 66 2/3% of the investors in the financing transaction (the minimum participation level was subsequently lowered and may be lowered yet again).

Abraxas Petroleum extends exchange offer for 11½% '04 notes

Abraxas Petroleum Corp. said on Wednesday (Jan. 15) that it had extended its previously announced offer to exchange cash, stock and new debt for its existing Series A and Series D 11½% senior secured notes due 2004 to 12 midnight ET on Jan. 22, subject to possible further extension, from its previous deadline at 12 midnight ET on Tuesday (Jan. 14).

As of the close of business on Tuesday, $158.1 million principal amount of the notes had been validly tendered or guaranteed - up from the $151 million which had been tendered or guaranteed by the prior deadline on Monday (Jan.13), but still well below the minimum tender threshold of 99% of the approximately $189 million of outstanding notes, which is a condition for the completion of the offer, among other conditions.

AS PREVIOUSLY ANNOUNCED: Abraxas, a San Antonio, Tex.-based independent oil and natural gas exploration and production company, said on Dec. 9 that it was beginning the exchange offer for its 11 ½% notes, which the company had jointly issued along with its wholly owned subsidiary, Canadian Abraxas Petroleum Limited.

Abraxas said that it would offer the holders of the existing notes a package consisting of $264 in cash, $610 principal amount of new 11½% series A senior secured notes due 2007 (Abraxas subsequently corrected this to 11½% series A secured notes due 2007 in a press release Thursday, Dec. 12), and approximately 31.36 shares of Abraxas common stock, per $1,000 principal amount of the existing notes tendered. .

Abraxas said that the interest on the new notes would be payable in cash unless prohibited; if cash interest payments are prohibited, interest would be paid in kind (i.e., paid the form of additional new notes) in principal amount equal to the amount of the accrued and unpaid interest on the new notes, plus an additional 1% per annum accrued interest for the applicable period.

Abraxas further said that the notes and shares of its common stock to be issued in the exchange offer have not been registered for unrestricted public trading under the Securities Act of 1933, as amended.

On Dec. 12, Abraxas, in addition to correcting the nomenclature of the new notes being offered as part of the exchange offer consideration, said that the offer would expire at 12 midnight ET on Tuesday (Jan. 7), which was subsequently extended several times when the minimum tender threshold was not achieved.

Petco files to offer shares; proceeds slated for 10¾% bond redemption

Petco Animal Supplies, Inc. said on Tuesday (Jan. 14) that it has filed a registration statement with the Securities and Exchange Commission relating to a proposed public offering of shares, the proceeds of which are slated to be used to redeem or repurchase $40 million principal amount of its 10¾% senior subordinated notes.

Petco, a San Diego-based specialty retailer of premium pet food, supplies and services, said it plans to offer 12.5 million shares of its common stock, including 2.4 million shares to be offered by Petco and the remaining 10.1 million shares to be offered by selling stockholders. The selling stockholders also expect to grant the underwriters an greenshoe option to purchase an additional 1.875 million shares of common stock to cover over-allotments, if any.

Petco will not receive any proceeds from the sale of the shares by the selling stockholders.

Morgan Stanley and Salomon Smith Barney are acting as joint book-running managers for the equity offering.

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