Hollywood Entertainment financing to repay 10 5/8% '04 notes

Hollywood Entertainment Corp. (Caa1/B-) said on Thursday (Dec. 5) that it had received a fully underwritten commitment from UBS Warburg LLC for a new senior credit facility consisting of a $200 million term loan and a $50 million revolving credit facility, each maturing in 2008. It said that the proceeds of the credit facility, along with the $200 million of planned new senior subordinated notes due 2011 which the company announced on Wednesday (Dec. 4), will be used to redeem the balance of the company's existing 10 5/8% senior subordinated notes due 2004, repay amounts outstanding under Hollywood's existing credit facilities, and would be used as well as for general corporate purposes.

AS PREVIOUSLY ANNOUNCED: Hollywood Entertainment, a Portland, Ore.-based video rental store chain operator (No. 2 in the U.S. behind Blockbuster) was heard by syndicate sources on April 18 to be readying an off-the-shelf placement of $275 million of eight-year senior subordinated notes, with the proceeds slated to be used to redeem the $250 million of outstanding 10 5/8% notes. Earlier, it had filed a registration statement with the Securities Exchange Commission covering the issuance of up to $300 million of non-convertible debt securities, which became effective on Feb. 14.

On April 30, Hollywood said that it had postponed the planned issuance of the new notes, saying that although the response from prospective institutional investors in the new issue over the previous week had indicated that it could have completed the issuance of the new notes at a lower interest rate than the existing 10 5/8% notes, it felt that the lower interest rate would not be enough to compensate for the then-current call premium on the outstanding notes of 105.313% [of par value] and expenses, which Hollywood would have had to pay to redeem the existing notes. Hollywood pointed out that it was "under no pressure" to refinance the 10 5/8% notes in the near term, so it therefore decided to postpone the financing transaction "until such time as it believes it can accomplish its objectives at a lower net cost when considering the reduced interest of the new notes together with the call premium and expenses on the existing notes." Hollywood noted that the call premium on the 10 5/8% notes would be reduced from 105.313% to 102.656% on August 15, and would then remain there until August 15, 2003, at which time the notes would be redeemable at par.

Fairchild accepts tendered 10¾% '09 notes for purchase

The Fairchild Corp. said on Wednesday (Dec. 4) that it has accepted for purchase all of the 10¾% senior subordinated notes due 2009 which were tendered by their holders under the previously announced cash tender offer for the notes and the related consent solicitation, which expired as scheduled at 9 a.m. ET on Dec. 3, with no further extension. As of the expiration deadline, $225 million of the notes, or 100% of the outstanding principal amount, had been tendered.

The company said that payment for the notes, on previously announced terms, would be made Wednesday by Fairchild, which was to deposit the purchase price for all tendered notes in cash with The Bank of New York, as Depositary; Bank of New York will act as agent for the tendering holders for the purpose of receiving the purchase price and transmitting payment to the tendering holders.

Banc of America Securities LLC (call 888 292-0070) was the dealer manager and solicitation agent for the tender offer and the consent solicitation. The information agent was D.F. King & Co., Inc. (call 800 207-3158).

AS PREVIOUSLY ANNOUNCED, Fairchild, a Dulles, Va.-based manufacturer and supplier of precision fastening systems used in aircraft and a distributor of aerospace parts, said on Oct. 22 that it was beginning a cash tender offer for any and all of its outstanding 10¾% notes, as well as a related solicitation of noteholder consents to amending the notes' indenture to eliminate substantially all restrictive covenants and certain events of default.

The company initially said that the tender offer would expire at 12:01 a.m. ET on Nov. 20 (this was subsequently extended), and that the consent deadline would be 5 p.m. ET on Nov. 4, subject to possible extension.

Fairchild said it would purchase the notes at par value, (i.e. $1,000 per $1,000 principal amount of notes tendered) plus accrued and unpaid interest up to the payment date. The par purchase price would include a consent payment of $10 per $1,000 principal amount for all notes tendered by the consent deadline. Holders tendering notes after the consent date would not be paid the consent payment as part of their consideration, and would receive $990 per $1,000 principal amount.

The company said that if the notes were accepted for purchase, payment for tendered notes and consents would occur promptly after the expiration of the offer and concurrently with the closing of the sale by Fairchild of its fastener business to Alcoa Inc. It said that consummation of the tender offer, and payment for tendered notes, would be subject to the satisfaction or waiver of various conditions, including the condition that there be validly tendered and not validly withdrawn at least a majority of the outstanding principal amount of notes, as well as the condition that the sale by Fairchild of its fastener business to Alcoa be consummated.

On Nov. 4, Fairchild said that today that as of 6 p.m. ET on Nov. 1, it had received consents from the holders of 53% of the outstanding 10¾% notes, achieving the requisite amount of consents to the proposed indenture changes under the terms of the offer.

It said that tendered notes may no longer be withdrawn and tendered consents may no longer be revoked, except under the limited circumstances as described in the official Offer to Purchase and Consent Solicitation Statement.

Fairchild and the trustee under the indenture have executed and delivered a supplemental indenture containing the amendments, which will eliminate substantially all restrictive covenants and certain events of default under the indenture.

The amendments will not become operative, however, unless and until Fairchild accepts the tendered notes for purchase under the terms of the tender offer. If the amendments become operative, holders of all of the notes remaining outstanding will be bound thereby.

On Nov. 19, Fairchild said that it had extended the expiration deadline on its tender offer to 9 a.m. ET on Nov. 25, subject to possible further extension, from the previous Nov. 20 deadline. Fairchild said that the deadline was being extended to coincide with the anticipated closing of Fairchild's sale of its fastener business to Alcoa Inc.

As of the close of business on Nov. 14, $225 million of the notes, or 100% of the outstanding amount, had been tendered under the offer.

On Nov. 25, Fairchild again extended the expiration of the offer from Nov. 25 to 9:00 a.m. ET on Dec. 3, subject to possible further extension. Investor participation as of Nov. 25 remained at the previously announced 100% level.

On Tuesday (Dec. 3), Fairchild announced that it had completed the previously announced sale of its fastener business for approximately $657 million to Alcoa Inc., one of the conditions for the completion of the bond tender offer.

Ball completes consent solicitation for 7¾% '06, 8¼% '08 notes.

Ball Corp. (Ba3/BB) said on Wednesday (Dec. 4) that it had received and accepted the requisite consents from holders of its 7¾% senior notes due 2006 and its 8 ¼% senior subordinated notes due 2008 to amend certain provisions of the indentures governing the notes, under terms of its previously announced consent solicitation. That consent solicitation expired as scheduled at 5 p.m. ET on Tuesday (Dec. 3), without extension.

Ball Corp., the trustee and the subsidiary guarantors under the notes have executed supplemental indentures amending the indentures governing the notes in the manner described in the consent solicitation. It noted, however, that these amendments will not become operative unless and until Ball completes its previously announced acquisition of Schmalbach-Lubeca AG and related financings. Closing of the acquisition is expected to occur later this month.

On Thursday (Dec. 4) Ball was heard by high yield syndicate sources to have sold an upsized $300 million of new junk bonds, the proceeds of which are slated to go towards the Schmalbach-Lubeca acquisition.

Lehman Brothers Inc. (call 800 438-3242 or 212 528-7581) was the solicitation agent. Georgeson Shareholder Communications (call 866 423-4873 or 212 440-9800) was the information agent.

AS PREVIOUSLY ANNOUNCED: Ball Corp., a Broomfield, Colo. packaging company, said on Nov. 21 that it would solicit consents from holders of record (as of the close of business on Nov. 19) of its 7¾% and 8¼% notes to amend certain provisions of the indentures governing the notes. It set 5 p.m. ET on Dec. 3 as the expiration deadline for the consent solicitation, subject to possible extension.

The company said that amending the notes would permit it to own Schmalbach-Lubeca AG and other foreign operations in a more tax efficient manner. The company announced on Aug. 29 it would be acquiring Schmalbach-Lubeca for $900 million. It said closing was expected to take place sometime this month.

Ball said that while the acquisition depends on the company obtaining financing - Ball said it was planning a new credit facility and a sale of $200 million of junk bonds - it does not depend on obtaining consents to amend the note indentures.

Noteholders who consent to the indenture change by the expiry date would receive a cash payment of $2.50 per $1,000 principal amount of notes if the amendment is approved and the acquisition of Schmalbach-Lubeca is completed.

Ball said that the consent solicitation would be subject to approval by the holders of at least a majority in aggregate principal amount of each series of the notes.

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