Hometown America sets consideration in tender for Chateau notes

New York, Oct 15 - Hometown America, LLC, said that it has determined the consideration it will pay to tendering holders of the outstanding 8 ½% senior notes due 2005, 7 1/8% senior notes due 2011 and 6.92% Mandatory Par Put Remarketed Securities due 2014 which were issued by CP LP (Ba1/BBB-), a unit of Chateau Communities Inc., which is being acquired by Hometown.

The company said that the total consideration to be paid for each validly tendered 8½% note tendered before the now-expired consent deadline will be $1,092.30 per $1,000 principal amount of notes tendered and accepted for purchase, which includes a $25 per $1,000 principal amount consent payment. Tender offer consideration for those holders tendering notes after the consent deadline will be $1,067.30 per $1,000 principal amount.

The total consideration to be paid for each validly tendered 8 1/8% note tendered before the consent deadline will be $1,193.35 per $1,000 principal amount, which includes a $25 per $1,000 principal amount consent payment. Tender offer consideration for those holders tendering notes after the consent deadline will be $1,168.35 per $1,000 principal amount.

The total consideration to be paid for each validly tendered 6.92% MOPPRS tendered before the consent deadline will be $1,061.07 per $1,000 principal amount, which includes a $25 per $1,000 principal amount consent payment. Tender offer consideration for those holders tendering notes after the consent deadline will be $1,036.07 per $1,000 principal amount.

As of the pricing deadline at 2 p.m. ET on Oct. 14, holders had tendered and not subsequently withdrawn $100 million of the 8½% notes; $139,308,333 of the 7 1/8% notes; and $97.950 million of the 6.92% securities, unchanged from the investor tender levels for all three series as of Oct. 6, when the offers were last extended.

The respective tender offers for the three series of notes and securities continue on and will expire at 5 p.m. ET on Oct. 16, subject to possible further extension.

All other terms and conditions of the tender offers and related consent solicitations remain unchanged.

As previously announced, Hometown America, a Chicago-based developer and operator of manufactured housing communities said on Sept. 4 that its wholly owned subsidiary, Chopper Partnership Merger Sub, LLC, had begun separate but simultaneous cash tender offers to purchase all of the outstanding Chateau Communities' 8½% notes, 7 1/8% notes and 6.92% securities, as well as related consent solicitations to amend the indenture governing each series of notes. Chateau had issued $100 million of the 8 ½% notes in February 2000, $150 million of the 7 1/8% notes in October 2001, and $100 million of the 6.92% MOPPRS in December 1997.

Hometown initially set a consent date of 5 p.m. ET on Sept. 16, said the prices it would offer for the securities would be set at 2 p.m. ET on Sept. 26, and said the tender offers would l expire at midnight, Sept. 30 (all of the deadlines were subsequently extended - the consent deadline, ultimately, to 5 p.m. ET on Sept. 29, and the offer expiration, ultimately to 5 p.m. ET on Oct. 16. Pricing for the tender offers- originally scheduled for Sept. 26 and later extended first to Sept. 29 and then to Oct. 7 - ultimately occurred at 2 p.m. ET on Oct. 14).

The company said that the tender offers and consent solicitations were being conducted in connection with the previously announced agreement by Hometown America, to acquire Chateau Communities, of Greenwood Village, Colo., the nation's largest manufactured home community owner and operator, in a $2.2 billion deal that includes Hometown's assumption of $1.2 billion of Chateau debt. Chateau shareholders voted to approve the proposed merger on Sept. 30.

It initially said that the total consideration to be paid for each validly tendered 8½% notes would be based on a fixed spread of 85 basis points over the yield to maturity of the U.S. Treasury 1 5/8% note due March 31, 2005 at 2 p.m. ET on the pricing date (subsequently changed to a 45 bps fixed spread and still later to 25 bps). It initially said the total consideration to be paid for each validly tendered 7 1/8% notes would be based on a 125 bps fixed spread over the yield on the 5% Treasury note due Aug. 15, 2011 (subsequently changed to a 60 bps fixed spread and still later to 25 bps). And it initially said that the total consideration to be paid for each validly tendered 6.92% MOPPRS would be based on an 80 bps fixed spread over the yield on the 1¾% Treasury note due Dec. 31, 2004 (subsequently changed to a 40 bps fixed spread and still later to 25 bps).

The company said that total consideration for each series of notes would include a $25 per $1,000 principal amount consent payment for holders tendering on or before the consent deadline.

Hometown said that holders tendering their notes after the consent expiration date would not be entitled to receive the consent payment. Holders tendering their notes under the terms of the tender offers would be required to consent to the proposed indenture amendments, which would eliminate substantially all of the restrictive covenants contained in the indenture. Tendered notes could not be withdrawn and consents could not be revoked after the end of the consent period.

The company said that the tender offers would be subject to the satisfaction of certain conditions, including receipt of consents in respect of the requisite principal amount of notes and the completion of the merger with Chateau.

JPMorgan (866 834-4666) and UBS Investment Bank (888 722-9555) are the dealer managers for the offers and solicitation agents for the consent solicitations. MacKenzie Partners, Inc. is the information agent (call collect at 212 929-5500 or toll-free at 800 322-2885.

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