Holmes Group extends tender for 9 7/8% notes

New York, May 3 - The Holmes Group Inc. said it has again extended its tender offer for its 9 7/8% senior subordinated notes due 2007. The offer will now expire at midnight ET on May 5, pushed back from midnight ET on May 4. It was originally midnight ET on April 27.

As of April 30, the company had received tenders of $67.2 million or 82.2% of the $81.775 million of the notes issued in 1997 and all $18.3 million of the notes issued in 1999. That was up from $67.15 million and $81.775 million respectively on April 26.

The company said it has the consents to complete the tender once its new bank financing is in place. Holmes announced Monday it has received commitments for $425 million of new bank debt.

Holmes has sufficient consents to put into effect the proposed indenture amendments. Holmes will execute supplemental indentures incorporating those changes. These supplemental indentures will only become operative if the company accepts the notes for payment under the terms of the tender offer. When the amendments become operative, they will be binding even on holders of notes not tendered for purchase in the tender offer.

Holmes Group, a Milford, Mass., consumer products company, said on March 30 that it had begun a cash tender offer and consent solicitation for all its outstanding 9 7/8% notes. Holmes said it was tendering for the notes as part of a refinancing of its debt.

Holmes said it would offer total consideration of $1,041.14 per $1,000 principal amount of the notes, including a consent payment of $20 per $1,000 principal amount for those notes tendered at or before the consent deadline. Holders would also receive accrued interest on their securities.

Holmes said that under the consent solicitation, it was seeking to eliminate substantially all of the restrictive covenants and certain events of default in the note indenture and to make other amendments.

It said that closing of the tender offer would be subject to conditions, including the closing and funding of new senior credit facilities and the now-fulfilled requirement that the company receive consents from holders of a majority by principal amount of the notes.

The company expects to repay both the notes and its existing senior secured bank credit facilities with proceeds of a new senior secured credit facility.

The refinancing is being undertaken to take advantage of current market opportunities in advance of the expiration of Holmes' existing senior bank credit facilities beginning in January 2005, the company added.

Credit Suisse First Boston LLC is dealer manager and solicitation agent for the tender offer (800 820-1653 or collect at 212 538-4807). Morrow & Co. Inc. is information agent (800 654-2468 or collect at 212 754-8000).

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