IAC obtains tenders for $456.7 million 7% notes; holders exchange $277.4 million notes

By Jennifer Chiou

New York, Aug. 22 - IAC/InterActiveCorp. received tenders from holders of $456.7 million of its 7% senior notes due 2013 in a cash offer that expired at 12:01 a.m. ET on Aug. 20, according to an 8-K filing with the Securities and Exchange Commission.

In addition, holders of $277.4 million of notes opted to exchange their securities.

On July 18, the company said that some holders of its 7% notes would exchange their notes for $300 million of 9½% senior unsecured notes due 2016 to be issued by Interval Leisure Group, Inc.

Following the transactions, $15.9 million of notes remains outstanding.

The offer expiration was previously pushed back from midnight ET on Aug. 11 and, before that, from Aug. 6.

The consent deadline was 5 p.m. ET on Aug. 4, previously extended from 5 p.m. ET on July 23.

On Aug. 11, holders had tendered $456.48 million of the notes.

The payout for each $1,000 principal amount of notes was to be determined based on the present value on the settlement date of all future cash flow to Jan. 15, 2013, based on the bidside yield on the 3 5/8% Treasury note due Dec. 31, 2012 plus 100 basis points minus accrued interest.

When the tender offer was first announced, the spread over the yield on the Treasury note was 215 bps. The company raised the tender price for the 7% notes on July 18 by cutting the fixed spread.

The total payment included a consent fee of $30 per $1,000 principal amount for notes tendered by the consent deadline.

All holders who tendered also received accrued interest up to but excluding the settlement date.

As previously announced, IAC entered into an agreement with certain noteholders under which IAC has agreed, among other things, to amend the terms of the offer and consent solicitation.

The company was soliciting consents to amend the indenture to eliminate all of the restrictive covenants and some events of default.

The proposed amendments required consents from holders of a majority of the notes.

The offer also required that IAC satisfy or waive all conditions of the proposed spinoffs to its stockholders. The distribution of shares of any company to be spun off must have occurred before the expiration, and the supplemental indenture implementing the proposed amendments must be executed.

The issue and exchange of the new Interval notes were made in connection with the spinoff of Interval, the company said.

The company previously said it received consents from holders of more than 50% of the notes.

The exchange was intended to create a succession event for the purposes of credit default swaps, with Interval as the sole successor of IAC.

Interval had previously planned to sell $300 million of eight-year notes as a regular new issue of junk bonds. Price talk was set at 10¾% to 11% on July 15.

Consummation of the tender offer and consent solicitation was not a condition to any of the proposed spinoffs.

Morgan Stanley & Co., Inc. (800 624-1808 or collect at 212 761-1941) was the dealer manager. MacKenzie Partners, Inc. (800 322-2885 or collect at 212 929-5500) was the information agent.

According to the filing, the company paid holders about $511 million in cash related to the tender offer and exchange.

IAC is a New York-based operator of diversified businesses in sectors being transformed by the internet.

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