FXI reports over 99% of 7 7/8% notes tendered in exchange offer

By Mary-Katherine Stinson

Lexington, Ky., May 1 – FXI Holdings, Inc. announced in a press release the results of its exchange offer and consent solicitation for all of its $504,746,000 outstanding 7 7/8% senior secured notes due 2024 (Cusips: 36120RAA7, U36251AA1).

As of the expiration date of 11:59 p.m. ET on April 28, FXI reported that $500,202,000 in total principal of the 2024 secured notes, representing 99.1%, have been validly tendered and accepted by the company for exchange.

As previously reported, the company was offering to exchange each $1,000 existing note for $940 principal amount of new 12¼% senior secured notes due 2026 and $60 in cash.

Additionally, in terms of the total consideration, consenting noteholders will receive a $40 consent fee. Tendering noteholders will be delivering consents.

The early tender date was 5 p.m. ET on April 17. This was also the deadline for consenting holders who wish to receive the consent fee and the withdrawal deadline.

Noteholders who tendered after the early tender date but before the expiration time will receive the consideration of $940 in new notes and $60 in cash but will not receive the $40 consent fee.

Accrued interest will also be paid to the settlement date, May 1.

Interest on the new notes, for the sake of clarity, will accrue from the date of first issuance of the new notes.

The company was also conducting a consent solicitation asking noteholders to agree to the elimination of substantially all of the restrictive covenants, certain of the default provisions and certain other provisions contained in the indenture for the existing notes. The company also was asking for noteholders to consent to the release of all collateral securing the 2024 notes.

The company reported that all conditions for the consent solicitation were satisfied or waived. The exchange offer and consent solicitation were conditioned on noteholders representing at least 90% of the principal amount of existing notes tendering their notes before the expiration date.

Sufficient consents were received to approve the proposed amendments and collateral release, which required noteholders representing a majority of the existing notes to agree to the proposed amendments and representatives of two-thirds of the notes must consent to the collateral release.

The company entered the supplemental indenture on April 17, which will become effective on settlement.

Support agreement

As previously reported, FXI worked out a transaction support agreement, dated March 13, with holders of $394.9 million principal amount of the existing notes, or 78.2% of those notes, in which they agreed to validly tender all of their existing notes and deliver the related consents.

Supporting parties are receiving a support party fee as consideration for their commitments.

Also pursuant to the support agreement, certain indirect shareholders of the company will arrange an investment in the capital stock of an indirect parent of the company for $50 million cash consideration. Through a series of transactions, ultimately the cash consideration will be contributed to FXI as common equity.

The equity investment and borrowings under an asset-based revolver will be used to pay the cash portion of the settlement consideration and other fees and expenses related to the refinancing transactions, including the support party fee.

Ipreo LLC is the exchange agent (ipreo-exchangeoffer@ihsmarkit.com).

Jefferies is acting as a dealer manager on the transaction, a source noted.

FXI Holdings is a Media, Pa.-based polyurethane foam producer.

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