Hylsa completes exchange offer for 9¼% '07 notes

Hylsamex, SA de CV and its subsidiary Hylsa, SA de CV (Caa3/D) said on Monday (July 22) that Hylsa had successfully completed its previously announced offer to exchange new 10½% notes due 2010 for its existing 9¼% notes due 2007. It said the exchange offer had expired as scheduled on Friday (July 19) at 5 p.m. ET, with no further extension (Hylsa had last previously announced on June 14 that the offer would expire on June 28, but it issued no subsequent public announcement further extending the offer, although the company is presumed to have communicated the final extension to its noteholders). Hylsa received tenders under the exchange offer of approximately $161 million in principal amount of its 2007 notes (up from the $159 million of notes which had been tendered as of the last previous public announcement regarding the exchange offer, on June 14). Hylsa has accepted tenders of such notes in exchange for its new 10½% notes. Hylsa separately announced that it had also successfully reached agreement to restructure its remaining outstanding debt, which was a condition to the closing of the exchange offer. It said the closing and settlement of the exchange offer is scheduled for July 26.

AS PREVIOUSLY ANNOUNCED, Hylsa, a Monterrey, Mexico-based steelmaker, said on March 25 that it was beginning an offer to exchange the new 10½% notes for its $300 million of outstanding 9¼% notes. It said the new notes would be given to holders of an equal par amount of the old notes on a 1-for-1 basis. Hylsa also announced that it would solicit noteholder consents to proposed indenture amendments on the existing notes and a waiver of past defaults under the indenture. It initially set 5 p.m. ET on April 11 as the consent deadline and set 11:59 p.m. ET on April 19 as the tender offer deadline, both of which were subsequently extended. Hylsa said that 9¼% noteholders tendering their notes by the consent deadline (and not subsequently withdrawing them) would receive a $10 per $1,000 principal amount consent and exchange payment. It said that noteholders could also choose to consent without tendering their notes, in which case they would receive a $5 per $1,000 principal amount consent payment. The company said the exchange offer would be subject to certain conditions, including the receipt of at least 50% of the outstanding notes; consents from the holders of at least a majority of the notes to the proposed amendments and waiver; and consummation by Hylsa of an overall restructuring of its outstanding debt, as well as other customary conditions.

On April 12, Hylsa said that it had gotten consent of the holders of a majority of the outstanding 9¼% notes to the proposed indenture amendments and default waiver, a key condition to the overall exchange offer, and also announced that it would amend the terms of the offer so that it would pay the full $10 per $1,000 principal amount consent and exchange payment to all holders tendering their notes before the expiration of the exchange offer. It said that holders who previously consented to the proposed amendments and waiver, but who did not tender their notes, could tender their notes by the expiration deadline and still receive the full consent and exchange payment (rather than just the $5 consent payment). It said that notes tendered and consents delivered by the now-passed April 11 consent deadline could not be withdrawn or revoked. On April 22, Hylsa said that it had received tenders of approximately $153 million in principal amount of the 9¼% notes, thus satisfying a key condition of the exchange offer (that it receive the tenders of at least 50% of the outstanding notes, and the consent of the holders of at least a majority of the notes to proposed indenture changes and a default waiver.) Hylsa said that although these conditions had thus been satisfied, it would extend the expiration deadline of the offer to 11:59 p.m. ET on May 16 from the originally announced April 19, and would likewise extend the period during which holders could receive the consent and exchange payment until 5:00 p.m. ET on April 30. It said that notes tendered and consents delivered by the now-passed original expiration deadline (at 11:59 p.m. ET on April 19) could not be withdrawn or revoked.

On May 17, Hylsa said that the expiration date on the exchange offer had again been extended until 5 p.m. ET on June 14 from 11:59 p.m. ET on May 16. Hylsa said the offer was extended to allow it to complete the proposed restructuring of its outstanding debt. Hylsa said it had reached an agreement in principle with the steering committee representing its bank lenders on the restructuring, and was working toward implementing the terms of the restructuring with the entire bank group. Hylsa said that as of that date, it had received tenders of approximately $158 million in principal amount of its existing 2007 notes in exchange for the new 10½% notes due 2010. On June 14, Hylsa said that it was again extending the expiration date for its exchange offer, to 5 p.m. ET on June 28, from the previous June 14 deadline. Hylsa said it was extending the expiration date to allow it to complete its previously announced proposed restructuring of its outstanding debt. Hylsa further said it had reached an agreement in principle regarding the restructuring with the steering committee representing its bank lenders, and had substantially agreed with the lenders on the documentation for the restructured debt. Hylsa said it was continuing to make "significant progress" toward satisfying the conditions required for the restructuring to go into effect. It said the previously outlined terms of the exchange offer provided that the first interest payment date for the 10½% notes would be June 15, but because the offer had been extended several times since its inception and the new 10½% notes now would not be issued as of that date, Hylsa would instead pay accrued and unpaid interest on the closing date of the exchange offer on all of the existing 9¼% notes tendered and accepted for exchange at the annual rate of 9¼% through June 14, and at the rate of 10½% per annum from June 15 through the closing date of the exchange offer. Hylsa said that on the closing date of the exchange offer, it would pay accrued and unpaid interest at the rate of 9¼% per annum through March 15 on all of the existing 9 ¼% notes not tendered for exchange. The company further said that in response to inquiries from holders of the existing notes desiring to tender their notes under the exchange offer and receive the exchange payment, it would again offer the exchange payment for all of the 9¼% notes tendered prior to the expiration of the exchange offer. It said that each holder tendering their notes by the newly extended deadline for the exchange offer would receive a $10 exchange payment for each $1,000 principal amount of the existing notes tendered. Holders previously consenting to the proposed amendments and waiver under the indenture governing the existing notes, but not tendering their notes might still tender their notes by the deadline and receive the full $10 consent and exchange payment per $1,000 principal amount, rather than just the $5 consent payment. All other terms and conditions to the exchange offer and consent solicitation remained unchanged, and the exchange offer continued to be subject to the consummation by Hylsa of the overall restructuring of its outstanding debt, as well as other customary conditions. Hylsa said that as of June 14, it had so far received tenders of approximately $159 million of the 2007 notes in exchange for the new 2010 notes.

MacKenzie Partners, Inc. (call 800 322-2885 or call collect at 212 929-5500) was the information agent for the exchange offer.

Doe Run extends, amends exchange and cash tender offers for '03, '05 notes

The Doe Run Resources Corp. (Ca/B-) said on Friday (July 19) that it had extended its previously announced offer to exchange new notes plus a cash accrued interest payment for its outstanding 11¼% Series B senior secured notes due 2005, its outstanding 11¼% Series B senior notes due 2005 and its outstanding Series B floating interest rate notes due 2003, its previously announced concurrent cash tender off for those three series of notes and the previously announced related solicitation of noteholder consents to proposed changes in the indentures governing those notes, and said it had also amended the terms of the aforementioned offers. The company said it had amended the terms to - among other things - allow its noteholders the ability to elect to participate in a third offer, "the Exchange/Loan Offer," in addition to participating in the previously described cash tender offer or exchange offer. Holders who participate in this "Exchange/Loan Offer" will be able to exchange their notes for a participation interest in the Initial Senior Loan which the company, as previously announced, is entering into as part of its overall recapitalization. Doe Run said that it was extending the expiration time of the offers until 5 p.m. ET on Aug. 2, subject to possible further extension, from the previous July 19 deadline, to allow noteholders to consider participating in such an additional offer. Doe Run also said it was amending the terms of the exchange notes which noteholders could elect to receive as part of either the exchange offer or the newly announced "Exchange/Loan Offer" to include, among other things, the provision of a required 1% per annum cash interest payment on each of the first two interest payment dates (as opposed to the previously outlined provision contained in the "Description of Exchange Notes" found in the official Offering Memorandum, which indicated that such interest payments could be paid in full "in kind" (i.e., through the issuance of additional notes, with no cash component). Doe Run further announced that in addition to the inclusion of the new "Exchange/Loan Offer," it has amended the previously outlined terms of its "New Senior Credit Facility" (including the "Subsequent Senior Loan Participation") and its exchange notes to be issued to holders of its current notes successfully participating in the exchange offer. As amended, the New Senior Credit Facility will consist of the "Initial Senior Loan" in the amount of $35.7 million and a Subsequent Senior Loan in the amount of $25 million, $10 million of which will be committed by Regiment Capital Advisors, LLC at closing to provide Doe Run with additional working capital under certain circumstances in the future. The balance of the Subsequent Senior Loan is to be funded at the request of Doe Run subject to the consent of the lenders. The Renco Group, Inc., ultimate parent of Doe Run, has agreed to take a participation interest in $5 million of the aforementioned $10 million "Regiment Credit Support."

Holders of Doe Run's currently outstanding notes who participate in the Initial Senior Loan will have the option - but not the obligation - to participate in the Subsequent Senior Loan. Noteholders who have already tendered their notes into the cash tender offer or the exchange offer will have the right to withdraw or amend such tenders; noteholders who wish to tender their notes into the new "Exchange/Loan Offer" must transmit a completed Letter of Transmittal for such offer to the depositary and exchange agent for the offers.

AS PREVIOUSLY ANNOUNCED: On April 15, The Doe Run Resources Corp, a St. Louis-based metals smelting company, announced that it had reached an agreement in principle with its corporate parent, New York-based industrial conglomerate The Renco Group, Inc. and with Regiment Capital Advisors, LLC, under which Renco and Regiment would provide Doe Run with significant capital that would enable Doe Run to restructure its existing debt. Under that agreement in principle, Renco said it would purchase $20 million of Doe Run preferred stock and Regiment - already a significant holder of Doe Run's 11¼% senior and senior secured notes and its floating interest rate notes - said it would commit to lend Doe Run $35 million, and would offer other holders of Doe Run notes the opportunity to participate in making such loan. Doe Run said it planned to make a cash tender offer for a portion of its notes, and an exchange offer for the balance of the notes. The $55 million in proceeds of the Renco investment and the Regiment loan would be used to finance the cash tender offer, to pay the accrued interest as of March 15 on the notes that would be exchanged in the exchange offer, and to pay certain costs of those transactions. Doe Run said that if they were successful, the cash tender offer and the exchange offer would significantly reduce its outstanding debt. Doe Run would meanwhile be able to continue to operate all its facilities at present levels, and Doe Run's trade creditors would not be adversely affected. Besides the $20 million investment, Renco would also provide Doe Run with credit support of up to $10 million, if necessary, to provide additional working capital. Doe Run said the non-binding agreement in principle would be subject to agreement on the terms of definitive documentation and further said that the successful completion of the planned transactions would be subject to several conditions, including, among others, the participation by holders of 90% of the principal amount of each class of notes in the cash tender offer and/or the exchange offer (Doe Run originally issued $200 million of the 11¼% senior notes, $50 million of the 11¼% senior secured notes and $55 million of the floating rate notes). It would also be conditioned upon the satisfactory modification of Doe Run's U.S. and Peruvian revolving credit facilities. Doe Run said it anticipated the completion of definitive documentation for the Regiment loan and the Renco investment within 30 days of its press release, at which time more detailed terms would be announced and the cash tender offer and exchange offer would be commenced.

On May 16, Doe Run outlined the terms of the agreement in principal and announced its tender offer and exchange offer for the notes in an 8-K filing with the Securities and Exchange Commission. The company did not initially disclose expiration deadlines for either offer nor did it disclose deadlines for the related consent solicitations. Doe Run said that under the terms of its exchange offer, it would offer the holders of its outstanding 11¼% senior secured notes $770 per $1,000 principal amount of the notes in new Doe Run 11¼% exchange notes due 2007, plus a cash payment of $56.25 per $1,000 principal amount equal to the amount of accrued and unpaid interest through March 15. It would offer the holders of its existing 11¼% senior notes $670 per $1,000 principal amount of the notes in new exchange notes, plus the $56.25 per $1,000 principal amount interest payment, and it would offer the holders of the existing floating rate notes $670 per $1,000 principal amount of the notes in new exchange notes, plus an accrued interest payment of $46.90 per $1,000 principal amount. Doe Run said the exchange offer would be open only to those holders who could reasonably be defined as Accredited Investors under Rule 501 (a) of the Securities Act of 1933. Doe Run said that simultaneously with the exchange offer, it would begin a cash tender offer for the outstanding notes, under which it would offer to buy the notes at a price between $250 and $350 per $1,000 principal amount. Doe Run said that it would select as the cash payment the highest price specified by any noteholder that would enable the company to purchase the maximum amount of notes while not exceeding its target aggregate purchase price of $44 million. Doe Run said it would pay the same cash payment for all of the notes validly tendered at or below that cash payment price and not subsequently withdrawn, upon the closing of the transaction. It said that holders whose notes were accepted for purchase under the cash tender offer would not be eligible to receive any interest payment on them above the cash payment price. Any holder tendering notes under the cash tender offer would also be considered to have tendered them under the exchange offer as well. Should the amount of notes tendered under the cash tender offer and not subsequently withdrawn exceed the amount that the company would be able to buy and still stay within its available cash aggregate purchase price of $44 million, Doe Run would first accept for payment all notes tendered below that cash payment price and would then accept notes tendered at the cash payment price on a pro-rata basis. Any notes thus tendered under the cash tender offer which could not be purchased for cash would then be exchanged for the appropriate amount of new exchange notes and the appropriate cash interest payment. Doe Run said that should a holder choose to neither tender his existing notes under the exchange offer nor the cash tender offer, it reserves the right to leave such unexchanged or unpurchased notes outstanding upon the conclusion of its offers; it also, however, reserves the right (but is under no obligation) to subsequently purchase such notes as permitted under the terms of its new senior credit facility either on the open market or in negotiated transactions, either for similar or for different consideration as it is offering under the exchange offer and the cash tender offer. It also reserves the right to defease the remaining outstanding notes or to redeem them under the terms of their indentures. Any remaining outstanding notes will be subject to indenture changes for which Doe Run is seeking noteholder consent concurrently with its exchange and cash tender offers. Doe Run said the tender of notes under either the exchange offer or the cash tender offer would be considered to constitute noteholder consent to the proposed indenture amendments, which would eliminate substantially all of the restrictive operating and financial covenants in the indentures, and which would modify a number of the "event of default" provisions, and various other provisions currently contained in the existing notes' indentures. Doe Run also said that in connection with the offers, it would enter into a new $37.5 million, four-year senior secured credit facility with Regiment Capital Advisors, and that it would offer noteholders who initially elect to participate in the exchange offer the opportunity to participate as co-lenders under the New Senior Credit Facility on a pro-rata basis, based upon those noteholders' respective interests in the existing notes initially tendered in the exchange offer. The participation of the noteholders as co-lenders will be subject to Regiment's right, in its sole and absolute discretion, to lend at least 60% of the aggregate principal amount of the Initial Senior Loan. Each noteholder who elects to participate in the Initial Senior Loan will also participate as a co-lender in any subsequent senior loan approved by Doe Run's existing lenders on a pro- rata basis, in accordance with such noteholder's percentage interest in the Initial Senior Loan. The proceeds of the Initial Senior Loan will be used to consummate the exchange offer and the cash tender offer. Noteholders choosing to participate in the Initial Senior Loan will receive warrants exercisable for up to 20% of the fully diluted common stock of Doe Run, at an initial total exercise price of $2,000,000. The warrants would be distributed to the participating noteholders on a pro-rata basis in accordance with such participant's interest in the Initial Senior Loan. Doe Run said that consummation of the cash tender offer and the exchange offer, as well as related transactions, would be conditioned upon a number of conditions including - but not limited to - the valid tender (without subsequent withdrawal) of at least $125,000,000 total principal amount of the existing notes under the cash tender offer; the participation by 90% of the outstanding principal amount of each of the three series of existing notes in the exchange offer and/or the cash tender offer; and the receipt of the requisite consents to the proposed indenture changes. Doe Run said it expected to launch the tender offer and exchange offer by the last week of May, and warned that there could be no assurance that it would be able to successfully complete the transactions described. On June 6, Doe Run said in an SEC filing that it had begun an offer to exchange new notes plus a cash accrued interest payment for its outstanding 11¼% senior and senior secured notes due 2005, and its outstanding floating interest rate notes due 2003; had begun a concurrent cash tender off for those three series of notes; and had begun a related solicitation of noteholder consents to proposed changes in the indentures governing those notes. Doe Run said it was also offering noteholders choosing to participate in the exchange offer the option of also participating in its new senior credit facility as co-lenders. It outlined terms of the offers that were the same as those which Doe Run had already outlined in a previous SEC filing. In its latest filing, the company also said that the exchange offer, the cash tender offer and the right of participation in the senior loan would each expire at 5 p.m. ET on July 9, subject to possible extension. Tendered notes could be withdrawn at any time prior to the expiration date. On July 9, Doe Run extended the pending exchange offer, the cash tender offer and the consent solicitation to 5 p.m. ET on July 19, and said that it was providing updated projected financial information. The company further reported that it had been engaged in "constructive discussions" with holders of a "significant amount" of its notes, and said it was extending the expiration time of the offers and providing the updated projected financial information "as an aid to further discussion of the Offers."

State Street Bank and Trust Co. in Boston (call 617 662-1548 or fax documents to 617 662-1452) is the exchange agent and the depositary for the offers. MacKenzie Partners, Inc. (call 212 929-5500 or, toll-free 800 322-2885) is the information agent.

Ziff Davis Media extends 12% '10 note exchange offer

Ziff Davis Media Inc. (CCC-) said on July 16 that it had extended its previously announced offer to exchange a package of cash and new notes for its outstanding 12% senior subordinated notes due 2010, along with the related solicitation of noteholder consents to its proposed financial restructuring plan. The offer was extended to 9 a.m. on July 23, 2002, subject to possible further extension, with Ziff Davis citing "positive results [of the exchange offer so far] and the continued strong support" for proposed restructuring plan. It said that as of July 16, preliminary tabulations reflected that holders of over 87% of the aggregate face amount of bonds had now formally accepted the exchange offer, and that over 95% of bondholders and senior bank lenders who voted had also consented to the prepackaged plan which Ziff Davis might use to implement the restructuring. The company also said that the $15 million bond interest payment that came due on July 15 will be included as part of the total value of cash and new securities that will eventually be issued to the noteholders once the exchange offer or the previously announced pre-packaged plan of reorganization is completed.

AS PREVIOUSLY ANNOUNCED, Ziff Davis Media, a New York-based publisher of technology-oriented magazines, said on May 1 that bondholders representing approximately 60% of its $250 million of 12% notes had agreed in principle to participate in a comprehensive financial restructuring, under which the company would offer the holders of the outstanding notes an aggregate of $30 million in cash, $95 million in new payment-in-kind senior subordinated notes issued by Ziff Davis Media, as well as both shares of a new preferred stock and warrants for the purchase of common stock of Ziff Davis Holdings Inc., the parent company of Ziff Davis Media, in exchange for their existing notes. Completion of the exchange offer would allow Ziff Davis to reduce its debt by approximately $155 million and its cash debt service requirements over the next several years by approximately $30 million annually. Ziff Davis also announced that In connection with such agreements, the controlling stockholder of Ziff Davis Holdings - Willis Stein & Partners III LP - and other existing stockholders had agreed in principle to make an equity cash infusion of $80 million, in exchange for new preferred stock and warrants for the purchase of common stock in Ziff Davis Holdings Inc. in order to facilitate the planned restructuring. Ziff Davis Media's existing bank credit agreement would meanwhile remain in place, with an amendment incorporating certain anticipated modifications to be negotiated with the bank lenders. Ziff Davis said that the obligations of all parties to participate in the financial restructuring would be subject to a number of conditions, including an amendment to the senior bank credit agreement, acceptances of the exchange offer for the notes by the holders of at least 95% of the existing senior notes, and finalization of documentation. In connection with the exchange offer, Ziff Davis further said that it planned to solicit consents for a pre-packaged plan of reorganization which, if used, would result in the company's business operations continuing uninterrupted and with customers, trade creditors and employees being unaffected. The company said that following the negotiation of a comprehensive amendment to its bank credit agreement, it expected to begin to formally solicit bondholders within the next few weeks to tender their senior notes in the proposed exchange offer.

On June 17, Ziff Davis said that it had received consents from the holders of approximately 90% of the outstanding loans under its senior credit facility and had reached an agreement in principle with those holders regarding the proposed amendment to the existing credit agreement. It said that the proposed amendment provided for, among other things, the company's existing senior credit agreement to be amended and restated, subject to certain customary conditions, including the final approval by all of the lenders and the completed restructuring of the company's 12% notes. Ziff Davis further said that it had formally begun solicitation of votes in support of its financial restructuring plan from holders of the 12% notes and from the senior lenders. The company reiterated that it was on track to complete its financial restructuring by the end of the summer.

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