ISG Resources gets consents from 10% '08 noteholders

ISG Resources, Inc (Caa1) said on Thursday (Aug. 8) that it has received tenders and consents from holders of its 10% senior subordinated notes due 2008 sufficient to amend the notes' indenture. The company had been soliciting noteholder consents to the indenture changes as part of its previously announced cash tender offer for the notes, and the related consent solicitation. That consent solicitation expired as scheduled at 5 p.m. ET on Wednesday (Aug. 7) without extension. As of that deadline, holders of approximately 99% of the outstanding notes had tendered their notes and had consented to the proposed indenture changes.

ISG Resources said it plans execute a supplemental indenture which incorporates the newly approved amendments; however, the amendments will not become effective unless and until the notes are accepted for payment by the company under terms of the tender offer and consent solicitation. ISG cautioned that once the amendments become effective, even holders of notes not tendered in the offer will be bound by them.

AS PREVIOUSLY ANNOUNCED: ISG Resources, a Salt Lake City, Utah-based provider of coal combustion products management and marketing services to the electric power industry, said on July 25 that it had begun a cash tender offer for its $100 million of outstanding 10% notes, as well as a related consent solicitation. It said the tender offer would expire at 12 midnight ET on Aug. 21, while the consent solicitation would expire at 5 p.m. ET on Aug. 7, with both deadlines subject to possible extension. The total consideration to be paid for each validly tendered note (which includes a $10 per $1,000 principal amount of notes tendered consent payment, where applicable), will be equal to 101% of par (i.e., $1,010 per $1,000 principal amount), plus accrued and unpaid interest on the notes up to, but not including, the date of payment.

Only those holders tendering their notes prior to the consent deadline (thus granting their consent to the proposed indenture changes) would be eligible to receive the consent payment. The indenture amendments would, among other things, eliminate substantially all of the indenture's restrictive covenants and would amend other provisions contained in the Indenture. ISG said that adoption of the amendments would require the consent of the holders of at least a majority of the principal amount of the outstanding notes. Holders tendering their notes would be required to consent to the proposed amendments and holders could not deliver consents to the proposed amendments without tendering their notes in the tender offer. Holders tendering their notes after the consent deadline, though before the expiration deadline, will receive the total consideration less the $10 per $1,000 principal amount consent payment.

ISG said that its corporate parent, Industrial Services Group, Inc, announced on July 15 that it had executed a definitive merger agreement, under which it would be acquired by Headwaters Inc., a developer of alternative fuel and energy related technologies, by means of a merger. ISG said the acquisition is subject to the receipt of required regulatory approvals and other customary conditions. The parties expect the acquisition to be completed on or about Aug. 22. The tender offer for the notes is conditioned upon, among other things, the now-fulfilled requirement of receipt of the consents to the indenture amendments, as well as the completion by Headwaters of its acquisition of Industrial Services Group. ISG further said that under terms of noteholder agreements between ISG Resources and certain institutional holders of the notes, the holders of approximately 61.7% of the outstanding principal amount of the notes agreed to tender their notes under the tender offer and deliver their consents to the proposed amendments prior to the consent deadline, subject to the satisfaction of all the conditions to those noteholder agreements. ISG said it therefore expected to receive the requisite consents prior to the consent date. Notes tendered and consents delivered before the consent deadline may not be withdrawn or revoked, respectively, after the consent deadline.

Morgan Stanley & Co. Inc. (call 800 223-2440, ext. 2492) is acting as the dealer manager for the tender offer and the solicitation agent for the consent solicitation, while D. F. King & Co., Inc., (call 800 848-3402) is the information agent. The depositary for the tender offer is U.S. Bank NA.

Filtronic in new purchase of 10% '05 notes

Filtronic plc (B1/B) said on Wednesday (Aug. 7) that it has bought in a further $5.807 million of its 10% senior notes due 2005 at a discount to par value. The company said the notes will be canceled, leaving $134.943 million of the notes still outstanding. Filtronic, a British designer and manufacturer of customized microwave electronic subsystems, said it has now bought in and cancelled a total of $35.057 million of $170 million original principal amount of the notes.

Merrill Corp. begins exchange offer for 12% '09 notes

Merrill Corp. (Caa3/D) said on Aug. 2 that holders of its outstanding 12% senior subordinated notes due 2009 have tendered 97.77% of their outstanding notes in exchange for a package of new debt and warrants, under an exchange offer which expired as scheduled at 5 p.m. ET on Aug. 1, without extension. Merrill also said that it had obtained consents from the holders of the notes to amend the existing indenture governing those notes not tendered, in order to delete substantially all of the covenants in that indenture and to subordinate those notes to all for the company's new Class A and Class B senior subordinated notes due 2009. The company further said that the issuance of the Class A and B 2009 notes and the warrants, together with consummation of each of the other elements of its previously announced restructuring (of which the exchange offer was a component) would likely take place on Friday (Aug. 9).

AS PREVIOUSLY ANNOUNCED, Merrill Corp., a St. Paul, Minn.-based diversified communications and document services company, said on June 3 that it had reached an agreement on a proposed recapitalization plan that would waive or cure existing defaults under its senior credit facilities as well as the outstanding notes, and which would inject additional capital into the company. Merrill said that under the proposed plan, its largest shareholder, DLJ Merchant Banking Partners II, LP, would invest $18.5 million in Merrill upon the final effectiveness of an amendment to the senior credit facility and the successful exchange and amendment of Merrill's outstanding senior subordinated notes and senior preferred shares. The company's senior lenders agreed not to exercise their rights and remedies under the senior credit facility as a result of previously disclosed defaults until at least Aug. 14, giving Merrill time to complete the recapitalization plan.

It said that holders of approximately 77% of the outstanding 12% notes and of 100% of Merrill's senior discount notes due 2008, and its senior preferred shares entered into a lockup agreement with Merrill in support of this proposed recapitalization, subject to certain terms and conditions. Merrill said that it planned to launch an exchange offer and consent solicitation for the senior subordinated notes, the senior discount notes and senior preferred shares within the next 30 days, in order to complete the plan. It said that the financial advisor for the senior subordinated noteholders was Chanin Capital Partners.

On July 8, Merrill said that it had begun an offer to exchange new senior subordinated notes, cash and warrants for any and all of its outstanding 12% notes, as part of the previously announced recapitalization plan. Under terms of the offer, holders of the existing 12% notes that participate in the exchange offer would receive new Class A senior subordinated notes due 2009, new Class B senior subordinated notes due 2009, and new Series A warrants (each warrant would entitle its holder to purchase one share of Class B common stock of Merrill Corp). The company said that it would give the holders of the existing notes who validly tender them and who do not subsequently withdraw them by the offer expiration deadline at 5 p.m. ET on Aug. 1 the following compensation per $1,000 principal amount of the existing 12% notes tendered: 1) $60.00 in cash; 2) $185.19 aggregate principal amount of the new Class A notes; 3) $814.81 aggregate principal amount of the new Class B notes; 4) an additional principal amount of Class B notes in lieu of payment of certain overdue interest payments on the exchanged outstanding 12% notes; and 5) 1.82 Series A warrants. The company further said that certain overdue and accrued interest on the exchanged existing 12% notes would be paid to holders of the new notes through a special payment on Dec. 31. It added that holders tendering their existing notes would be required to give their consent to certain proposed amendments to the terms of the old notes' indenture. The information agent for the exchange offer was D. F. King & Co., Inc. (call 800 848-3409).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.