Philippine Airlines parent's owner begins Dutch auction tender offer for 0% notes due 2011

By Angela McDaniels

Tacoma, Wash., May 14 - PAL Holdings, Inc. announced the launch of a Dutch auction tender offer for a portion of Philippine Airlines, Inc.'s $160 million outstanding principal amount of zero-coupon notes due 2011 (formerly floating-rate notes due 2000).

The offer is being conducted by Trustmark Holdings Corp., the controlling stockholder of PAL Holdings, according to a notice filed by PAL Holdings with the Philippine Stock Exchange.

The price range is $50.00 to $58.00 per note, which includes an early tender premium of $3.00 for notes tendered by 11 a.m. ET on May 19.

The offer will expire at 11 a.m. ET on May 22.

Also included in the offer is Philippine Airlines' $60 million outstanding principal amount of 0% unsecured bilaterals loans due 2011.

Trustmark plans to purchase up to $143 million of notes and loans under the offer.

Trustmark will become the beneficial owner of the purchased notes and loans, but plans to advance all payments made by Philippine Airlines under the notes and loans for future equity subscriptions.

J.P. Morgan Securities Ltd. is the dealer manager for the transaction.

The issuer is an airline based in Pasay City, the Philippines.

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