CanWest exchanges $509.1 million Hollinger Participation notes

New York, Nov. 18 - CanWest Media Inc. said it exchanged $509.1 million of the 12 1/8% senior notes due 2010 issued by Hollinger Participation Trust, "substantially all" the outstanding notes.

The company issued $631.1 million of new notes to tendering holders. CanWest Media also sold $130 million of new notes for cash.

Overall, the company said the effect of the transaction was to replace C$903.6 million of principal and interest on the old notes with C$908.1 million of new securities at an about 1% premium to the carrying value of the old debt.

CanWest said the Hollinger Participation Trust has now been wound up.

"From a CanWest perspective, this was a very successful transaction," CanWest chief financial officer John Maguire said in a news release. "CanWest was able to achieve an attractive refinancing of its most expensive debt at an extremely modest net overall premium."

At the previous announcement on Oct. 28, CanWest said it had amended the exchange and added that holders of "substantially" more than two-thirds of the notes have agreed to the amended terms.

The changes will increase the amount, shorten the maturity and extend the first redemption date of the new 8% senior subordinated notes on offer. In addition, the early tender deadline is extended.

Under the revised terms, holders of the trust notes are being offered $1,240 principal amount of new notes for each $1,000 principal amount of trust notes. Of the total, $30 principal amount of the new notes is an early tender payment for those that tender by 5 p.m. ET on Nov. 5. No payment will be made for accrued interest.

The new notes will now mature on Sept. 15, 2012 and will have call protection until Sept. 15, 2011. The call price will be par plus accrued interest.

The asset sale covenant in the new notes has been revised to provide for the grant by tendering holders of a power of attorney to implement the proposed amendments and instructions they are consenting to in the exchange offer and to add to those proposed amendments and instructions a revision to the transfer restrictions applicable to the trust notes.

All other terms remain the same.

Under the original terms announced on Oct. 8, CanWest said it was offering new 8% senior subordinated notes due 2014 for the Hollinger Participation notes.

The new notes will be obligations of CanWest.

CanWest was offering $1,200 principal amount of the new notes for each $1,000 principal amount of the Hollinger Participation notes.

Of the total amount of new notes, $30 million represents an early tender premium that will only be paid to holders who tender by Oct. 29.

The exchange ends at 5 p.m. ET on Nov. 15. Tenders may be withdrawn up to 5 p.m. ET on Nov. 5.

No payment will be made for accrued interest.

Holders who tender the Hollinger Participation notes will be required to consent to amendments to the trust agreement for the notes and to the indenture for the fixed-rate subordinated debentures due 2010 of 3815668 Canada Inc., in which the trust holds a participation interest. The amendments will allow the trust to be wound up once the exchange is completed and any remaining notes to be redeemed at par plus accrued interest.

The exchange is subject to conditions, including receipt of tenders and consents for at least two-thirds of the Hollinger Participation notes. CanWest must also obtain waivers and consents under its credit facility.

CanWest said it also plans to offer additional 8% senior subordinated notes due 2014 for cash in a Rule 144A/Regulation S offering.

CanWest Media is a subsidiary of CanWest Global Communications Corp., a Winnipeg, Saskatchewan, newspaper, television and advertising company.

Bondholder Services Corp. is the information agent (866 470-3900 or 212 430-3774).

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