Inland accepts tenders for 35.4% of 4.625% convertibles in exchange offer, falls short of consents

By Jennifer Chiou

New York, Aug. 6 - Inland Real Estate Corp. said it accepted tenders for $44.2 million, or 35.4%, of its $125 million of 4.625% convertible senior notes due 2026 in the exchange offer that ended at 5 p.m. ET on Aug. 5.

The offer and consent solicitation had previously been scheduled to expire at 5 p.m. ET on July 28. At the prior deadline, holders had tendered $45.6 million, or 36.5%, of the 4.625% convertibles.

Holders could elect to receive $1,000 principal amount of a new series of 5% convertible senior notes due 2029, a cash payment of $1,000 - subject to a $15 million limit - or a combination of cash and notes.

Of the accepted notes, $29.2 million was tendered for new notes and $15 million was accepted for the cash option.

Holders will also receive accrued interest up to but excluding the settlement date, which is slated for Aug. 10.

Because Inland did not obtain consents from holders of a majority of the notes, the proposed amendment to the note indenture will not become effective and the threshold for cross-acceleration will remain at $20 million. The company had been looking to amend the default provisions in the old notes to mirror those contained in the new notes.

Inland announced plans for the exchange offer on May 24. It said at the time that it would seek consents to increase the threshold for accelerating debt upon a default on any other debt to $100 million from $20 million.

The new notes will be callable beginning Nov. 21, 2014 and putable on Nov. 15, 2014, Nov. 15, 2016, Nov. 15, 2019 and Nov. 15, 2024.

In comparison, the existing notes are callable beginning Nov. 21, 2011 and putable on Nov. 15, 2011, Nov. 15, 2013, Nov. 15, 2016 and Nov. 15, 2021.

The company previously said it planned to fund the cash payment with cash on hand or with funds drawn under its credit facility.

This leaves $80.8 million of the notes outstanding.

The company previously said it began the offer to improve its financial flexibility by extending the repurchase and maturity dates of current bonds and by reducing debt.

Macquarie Capital (USA) Inc. (212 231-6594) was the dealer manager, and Global Bondholder Services Corp. (212 430-3774 or 866 387-1500) was the exchange agent and information agent.

Inland Real Estate is a real estate investment trust with a focus on open-air neighborhood, community, power and lifestyle shopping centers and single-tenant retail properties located primarily in upper Midwest markets.

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