Hartmarx retires remaining 12½% '03 notes

Hartmarx Corp. said on Wednesday (Dec. 18) that it had retired the remaining $10.3 million of its outstanding 12½% senior unsecured notes due 2003, effective Jan. 21 2003.

The company said that based on current borrowing rates under its Libor- and prime-based senior credit facility of about 4%, the cash interest savings during fiscal 2003 from this early retirement will be approximately $500,000. Upon full retirement of its $25.3 million of senior unsecured notes (including an earlier retirement of $15 million) and having refinanced its principal senior credit facility and repaid a $15 million 10.25% term loan in August, Hartmarx anticipates that interest costs for 2003 will be at least $4 million lower than 2002.

AS PREVIOUSLY ANNOUNCED: Hartmarx, a Chicago-based apparel maker, said on Oct. 28 that it had retired $15 million of its outstanding 12½% notes. It said the early retirement of the debt would take effect on Nov. 26. The company said the $25.3 million total face value of outstanding notes was callable in whole or in part at par and without penalty. It said that following the announced note retirement, approximately $10.3 million of the notes would remain outstanding.

The company indicated the notes were being retired using a portion of the proceeds of its new $200 million senior credit facility, which was entered into in August. Based on Hartmarx's then-current borrowing rates of approximately 4.3% under the Libor- and prime-based senior credit facility, the company estimated that cash interest savings during 2003 from the early note retirement would be approximately $1 million. It said that this interest savings would be in addition to the previously announced $2.5 million lower cash interest expected from the refinancing this past August of its principal credit facility.

Hartmarx projected that it would be profitable for the fourth quarter and full fiscal year ending Nov. 30, with further debt reduction to be realized by fiscal year end. At that time, it said, Hartmarx anticipated that it would be in a position to announce the early retirement of the remaining notes. It said that the early retirement of the notes would result in a non-cash extraordinary charge, net of income tax benefit, of approximately $900,000, or three cents per share, representing acceleration of unamortized debt discount and fees which otherwise would have been amortized to expense during 2003, but which would now be reflected in the company's fiscal fourth quarter ending Nov. 30.

Boyd Gaming begins tendering for 9½% '07 notes

Boyd Gaming Corp. said on Monday (Dec. 16) that it had begun a cash tender offer to purchase all of its outstanding 9½% senior subordinated notes due 2007. The tender offer will take place under previously announced terms.

Lehman Brothers (call Rad Antonov at 212 528-7581 or toll-free at 800 438-3242) and Deutsche Bank Securities will serve as the dealer managers for the tender offer. D.F. King & Co., Inc. (call 800 628-8510) will be the Information Agent for the tender offer.

AS PREVIOUSLY ANNOUNCED: Boyd Gaming, a Las Vegas-based gaming company, said in its quarterly 10-Q filing with the Securities and Exchange Commission on Nov. 14 that it had purchased and cancelled approximately $77.8 million principal amount of its 9¼% senior notes due 2003 in July, via privately negotiated transactions. It said that approximately $122.2 million principal amount of the notes remained outstanding following those transactions (out of the originally issued $200 million of notes).

Boyd said that it funded the purchase of those notes via borrowings from its bank credit facility. It repurchased the notes at prices ranging from 103.4% to 104.2% of par, plus accrued interest. The premium paid to repurchase the notes and the pro-rata portion of the unamortized deferred loan costs, together totaling $3.4 million, was recorded as a loss during the three-month period that ended Sept. 30 in the non-operating section of the income statement.

On Dec. 12, Boyd said that it planned to commence a cash tender offer to purchase all of its outstanding $250 million of 9½% notes and set 5 p.m. ET on Jan. 14, 2003 as the expiration for the tender offer, and 5 p.m. ET on Dec. 30 as the early tender deadline, both subject to possible extension.

Boyd said that under the terms of the proposed offer, the total consideration to be paid for each note validly tendered by the early tender deadline and accepted for payment would be $1,047.50 per $1,000 principal amount of notes tendered, plus accrued and unpaid interest. The total consideration includes an early tender premium of $10 per $1,000 principal amount where applicable. Holders tendering notes after the early tender deadline had passed but prior to the expiration of the tender offer would receive $1,037.50 per $1,000 principal amount of notes validly tendered and accepted for payment, plus accrued and unpaid interest.

It said that tenders of notes made prior to the Dec. 30 early tender deadline could not be validly withdrawn or revoked, unless Boyd were to reduce the tender offer consideration or the principal amount of notes subject to the tender offer or would be otherwise required by law to permit withdrawal. Tenders of notes made after the early tender deadline could be validly withdrawn at any time until the expiration deadline.

Boyd said that the tender offer would be conditioned upon the consummation of its proposed issuance of senior subordinated notes due 2012 (Boyd concurrently announced plans to sell $300 million of the notes), regulatory approvals and certain other conditions. It currently intends to call for redemption any 9½% notes that remain outstanding after completion of the tender offer, in accordance with the notes' indenture. The redemption, at the applicable price of $1,047.50 per $1,000.00 of principal amount, plus interest accrued and unpaid to the redemption date, would take place as soon as practicable upon consummation of Boyd's proposed issuance of its new senior subordinated notes due 2012.

On Dec. 13, Boyd Gaming was heard by high yield syndicate sources to have sold $300 million of the new 7 ¾% senior subordinated notes due 2010, proceeds of which will be used to fund the current tender offer.

R. H. Donnelley completes consent solicitation for 9 1/8% '08 notes

R.H. Donnelley Inc. (B1/B+) said on Monday (Dec. 16) that it had successfully completed the consent solicitation related to its previously announced tender offer for its 9 1/8% senior subordinated notes due 2008. The solicitation expired as scheduled at 5 p.m. ET on Monday without extension.

As of the consent deadline, the company had received tenders of $128.7 million of the notes, representing approximately 85.8% of the outstanding principal amount, as well as the related consents. It said that holders of those notes would be entitled to receive the total consideration for their notes as previously outlined.

AS PREVIOUSLY REPORTED, R. H. Donnelley Inc., a Purchase, N.Y. -based directory publishing subsidiary of R.H. Donnelley Corp., said on Nov. 25 that it was planning to make a tender offer for all $150 million of its outstanding 9 1/8% notes, and would also begin a related solicitation of noteholder consents to proposed changes in the notes' indenture.

The company said that it was anticipating that the tender offer purchase price (including any related consent payment) would be par plus accrued interest up to the date of repurchase, and that completion of the tender offer would be conditioned upon - among other things - the consummation of the pending acquisition by Donnelley of the Sprint Publishing and Advertising business and related financings.

Donnelley said that the exact terms and conditions of the tender offer and the consent solicitation would be specified in, and would be qualified in their entirety by, the tender offer and consent solicitation statement and related materials scheduled to be distributed to holders of 2008 notes.

The company further said that the offer would be financed with a portion of the expected proceeds of the parent company's $925 million two-part Rule 144A offering of senior notes and senior subordinated notes. Donnelley also said that it would use portions of the bond sale proceeds to partially finance the acquisition of the Sprint directory publishing business and to repay existing senior debt.

On Nov. 26, Donnelley was heard by high yield syndicate sources to have sold $925 million of new bonds in the previously announced two-part deal, a portion of the proceeds of which would be used to finance the tender offer for the 9 1/8% notes.

On Dec. 4, Donnelley said that it had begun the previously announced tender offer for all of its outstanding 9 1/8% notes and a related exit consent solicitation aimed at eliminating substantially all restrictive covenants and certain events of default under the notes' indenture. It said that holders could not tender their notes without delivering consents to the indenture changes and could not deliver consents without tendering their notes.

The tender offer, which began on Dec. 3, was scheduled to expire at 5 p.m. ET on Jan. 2, subject to possible extension. Holders tendering their notes and delivering their consents by the consent deadline of 5 p.m. ET on Dec. 16, also subject to extension, would receive total consideration equal to the tender offer purchase price of 98.5% of the principal amount of notes validly tendered plus an early consent premium equal to 1.5% of the principal amount for total consideration of par value. Holders tendering their notes and delivering their consents after the consent deadline but before the expiration would receive total consideration equal to the tender offer purchase price but would not receive the early consent premium. It said that accrued and unpaid interest would be paid on all validly tendered notes accepted for purchase.

Donnelley said that completion of the tender offer would be conditioned upon, among other things, the consummation of its pending acquisition of the Sprint Publishing and Advertising business and related financings.

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