Harbinger begins exchange offer, consent solicitation for 7 7/8% notes

By Angela McDaniels

Tacoma, Wash., May 14 - Harbinger Group Inc. began an exchange offer and consent solicitation for its 7 7/8% senior secured notes due 2019, according to a company news release.

The company is soliciting consents to proposed amendments to the indenture governing the 7 7/8% notes to provide it with, among other things, greater flexibility to repurchase or redeem its outstanding common stock.

If the proposed amendments become operative, the company will have the ability to purchase Harbinger common stock under a new $100 million share repurchase program authorized by the company's board of directors. The company may fund any such repurchase with cash on hand or other borrowings.

As of May 14, the beneficial holders of a majority of the outstanding 7 7/8% notes had committed to consent to the proposed amendments. These beneficial owners were not paid a consent fee by Harbinger and will have the right to participate pro rata with other holders of the 7 7/8% notes in the exchange offer.

The company is offering to exchange a portion of the outstanding 7 7/8% notes for up to $350 million principal amount of new 7¾% senior notes due 2022, which will be in addition to the $200 million 7¾% senior notes due 2022 issued in January.

Holders will receive $1,092.50 principal amount of new notes for each $1,000 principal amount of old notes tendered. This includes an early tender payment of $50.00 principal amount of 7¾% notes for each 7 7/8% note tendered by the early tender time, which is 5 p.m. ET on May 28.

The company will also pay accrued interest up to but excluding the settlement date, which is expected to be May 30 for notes tendered by the early tender time and June 13 for notes tendered after that time but prior to the offer expiration.

The exchange offer will end at 11:59 p.m. ET at the end of June 11.

If the offer is fully subscribed as of the early tender time, holders who tender after the early tender time will not have any of their notes accepted for exchange.

D.F. King & Co., Inc. (800 431-9633) will act as the information agent and the exchange agent for the exchange offer, and Wells Fargo Bank, NA (917 260-1550 or 612 667-0337) will act as the tabulation agent for the consent solicitation.

Harbinger Group is a diversified holding company based in New York City.

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