Colonial Realty to buy back $250 million of six notes series in oversubscribed tender offer

By Susanna Moon

Chicago, May 4 - Colonial Properties Trust said its operating partnership, Colonial Realty LP, accepted for purchase $250 million of notes in its tender offer.

The company will buy back $206.37 million of Colonial Realty' $210.70 million 4¾% senior notes due 2010, all of the $5 million of 8.8% medium-term notes due 2010 (Cusip 195896AK1) and $38.63 million of the $95.7 million 4.8% senior notes due 2011.

Other notes series included in the offer were the $20 million 8.8% medium-term notes due 2010 (Cusip 195891AJ4), $10 million 8.05% medium-term notes due 2010 and $95.7 million 4.8% senior notes due 2011.

The offer expired at midnight ET on May 1. Settlement was expected to occur on May 4.

As of the expiration date, investors had tendered $265.70 million of the outstanding principal amount of the notes. Because the amount of notes tendered exceeded the $250 million tender cap, the company said it will buy the 4.8% notes on a prorated basis, at 71.17% of notes tendered.

As previously noted, Colonial Realty accepted tendered notes based on priority levels.

The company increased the tender offer size on April 20 from $175 million.

As of 5 p.m. ET on April 17, the early tender date, holders had tendered $265.60 million principal amount of the notes. The breakdown is as follows, with notes listed in order of acceptance priority:

• $206.37 million of the 4¾% notes;

• None of the 8.8% notes (Cusip-195896AJ4);

• $5 million of the 8.8% notes (Cusip-195896AK1);

• None of the 8.08% notes;

• None of the 8.05% notes; and

• $54.25 million of the 4.8% notes.

As previously noted, the company offered $980 for each $1,000 principal amount of 4.8% notes and par for each of the remaining notes. In each case, the payout includes a $30 early tender premium for notes tendered by the early tender date.

Holders were also expected to receive accrued interest up to but excluding the settlement date.

Banc of America Securities LLC (888 292-0070 or 704 388-4603) was the lead dealer manager, and Wachovia Securities LLC was the co-dealer manager. Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) was the information agent.

Colonial Properties is a multifamily real estate investment trust based in Birmingham, Ala.

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