SPX tenders, seeks consents for $500 million of 7 5/8% notes due 2014

By Susanna Moon

Chicago, Jan. 8 - SPX Corp. said it began a tender offer for its outstanding $500 million principal amount 7 5/8% senior notes due 2014 that will run until 11:59 p.m. ET on Feb. 5.

SPX also is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants, to eliminate events of default and to reduce the minimum redemption notice period to three business days from 30 days.

The total purchase price will be $1,062.28 for each $1,000 principal amount of notes tendered by 5 p.m. ET on Jan. 22, the consent date. The total amount includes a consent payment of $20 per $1,000 of notes.

Holders who tender after the consent payment deadline will receive $1,042.28 per $1,000 of notes.

The company also will pay accrued interest up to but excluding the settlement date.

Holders may not tender their notes without delivering their consents or deliver consents without tendering their notes.

Tendered notes may be withdrawn and consents revoked by 5 p.m. ET on Jan. 22.

The initial settlement date will be following the consent payment date, and the final settlement date will be promptly after the offer ends, according to a company press release.

The tender offer and consent solicitation are conditioned upon execution of the supplemental indenture implementing the proposed amendments.

SPX said it also reserved the right to terminate the offer at any time and for any reason, including unfavorable market conditions.

"Eliminating the bonds will reduce our gross leverage toward our target range and reduce our annual interest expense," Jeremy Smelter, vice president and chief financial officer, said in the press release. "We expect to record a one-time expense in the first quarter of 2014 for the early extinguishment of debt, primarily related to the make-whole provision in these bonds."

D.F. King & Co., Inc. (212 269-5550 banks and brokers, 800 488-8075 or SPX@dfking.com) is the information agent and tender agent. J.P. Morgan Securities LLC (212 270-1200 collect or 800 245-8812) is the dealer manager and solicitation agent.

SPX is a Charlotte, N.C.-based provider of flow technology, test and measurement, thermal equipment and services and industrial products and services.

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