Nebraska Book exchanges $83.4 million 15% notes, repurchases remainder

By Angela McDaniels

Tacoma, Wash., Sept. 19 – Nebraska Book Holdings, Inc. received tenders for $83.4 million principal amount, or 75.8%, of its 15% senior secured notes due 2026 in a tender offer that expired at midnight ET on Sept. 16, according to a company news release.

In exchange for the 15% notes and accrued premium and interest due on them, the company issued $100.9 million principal amount of new 2% convertible senior PIK notes due 2026 on Sept. 19.

As previously reported, the company offered to issue up to $125 million of the convertibles in exchange for the 15% notes.

The exchange offer began March 18 and was extended six times, most recently from Aug. 30.

The amount of notes exchanged is unchanged from the amount of notes tendered as of Aug. 30 and up slightly from the $83.1 million principal amount tendered as of the original expiration date, April 14.

For each $1.00 principal amount of 15% notes tendered, holders received $1.05 principal amount of the new convertibles plus an additional amount of convertibles equal to accrued interest up to but excluding the closing date of the exchange.

Interest on the new convertibles will be paid in kind for the first two years and subsequently in cash if the company meets specified requirements.

In addition, the company amended its ABL credit facility on Sept. 19 to increase the total availability to $98.7 million.

The company borrowed under the ABL credit facility to fund privately negotiated repurchases of 15% notes not tendered in the exchange offer and repay in full any remaining 15% notes.

A forbearance agreement with holders of more than 75% of the notes expired at 5 p.m. ET on Sept. 19.

The exchange offer was conditioned on completing documentation for a new senior term loan from MAST Capital Management, LLC, the largest holder of the notes. On Sept. 19, a newly formed subsidiary of the company entered into a new $28.2 million 6% senior term loan due 2020 with funds managed by MAST and used the proceeds to acquire participation interests in term loans of Sonifi Solutions, Inc.

Georgeson (888 206-0860) was the information agent.

Nebraska Book is a Lincoln, Neb., provider of services to higher education retailers.

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