Revlon gets required consents for 12% notes, extends consent payment eligibility, expiration deadlines

New York, April 30 - Revlon Inc. (Caa1/CCC-) said that its wholly owned Revlon Consumer Products Corp. subsidiary received a sufficient number of consents to proposed changes in the indenture governing its 12% senior secured notes due 2005 from the holders of those notes, under its previously announced tender offer - as part of a tender effort for three series of notes - and the related consent solicitation.

The company said that the 12% noteholders had tendered about $352.971 million of the notes, or around 97% of the outstanding amount, (and thus, had also delivered their consents) by the previously announced consent deadline of 5 p.m. ET on April 29.

It said that the supplemental indenture incorporating the amendments will not take effect unless Revlon Consumer Products completes the tender offer for the notes, in accordance with previously outlined terms.

Revlon additionally said that it has extended the deadline for holders to tender the 12% notes and receive full consideration, including a previously announced consent payment, to the tender offer expiration deadline, from the April 29 consent deadline.

It further said that the tender expiration deadline for the 12% notes was moved back to 5 p.m. ET on May 14, subject to possible further extension, from the originally announced 3 p.m. ET on that day, explaining that in order to allow holders of the 12% notes to use the DTC Automated Tender Offer Program throughout the entire tender offer, the expiration had to be pushed back to 5 p.m. ET.

Revlon also said that its announcement constitutes formal declaration of the withdrawal deadline for the offer, as described in the official offer to purchase documents; accordingly, holders who have validly tendered their 12% notes as of this time are no longer permitted to withdraw the notes and their related consents; holders who tender any 12% notes between now and the expiration date of the tender offer will not be permitted to withdraw those notes.

The company meantime continues with its previously announced tender offers for its outstanding 8 1/8% senior notes due 2006 and its 9% senior notes due 2006, with no changes in their terms or conditions; those tender offers are scheduled to expire on May 14.

As previously announced, Revlon, a New York-based cosmetics maker, said on April 19 that it had begun tender offers for three series of its outstanding bonds as part of a comprehensive debt refinancing designed to lower its annual interest expense and extend the maturities of much of its debt.

Revlon said Revlon Consumer Products Corp. was offering to purchase $555 million of notes, consisting of any and all of its $363 million principal amount of 12% notes, any and all of its $116.2 million principal amount of outstanding 8 1/8% notes, and any and all of its $75.5 million principal amount of outstanding 9% notes (earlier this year, Revlon had successfully exchanged new equity for about $133 million of the $250 million originally issued 8 1/8% notes and about $175 million of the $250 million originally issued 9% notes as part of an overall exchange offer program, completed March 22, that reduced its debt and increased its common equity by more than $800 million). It also began soliciting consents from the holders of the 12% notes to proposed indenture changes.

Revlon set a consent deadline for the 12% noteholders of 5 p.m. ET on April 29 and said the tenders offers would expire at 3 p.m. ET on May 14, subject to possible extension (Revlon has now said that holders could continue to tender their 12% notes up to the offer expiration on May 14 and still receive total consideration, and extended that expiration for the 12% offer to 5 p.m. ET from the originally announced 3 p.m.).

Revlon said that it plans to set the total cash consideration that it will offer to holders of the 12% notes on the second business day before the offer expires (for a tentative pricing date of May 12, subject to possible extension), using a formula based on a 75 basis point fixed spread over the yield to maturity on the pricing date of the reference security, the 1.875% U.S. Treasury note due Nov. 30, 2005. Total consideration will include a consent payment equal to 2% of the principal amount of the notes tendered (i.e., $20 per $1,000 principal amount) for those holders who validly tender their notes by the consent deadline and do not subsequently withdraw them, thus consenting to the proposed indenture changes, which would eliminate substantially all of the restrictive covenants in the indenture and release the guarantees of Revlon Consumer Products Corp.'s obligations, and the collateral securing the company's obligations and those of its guarantors.

The company said that it will offer cash consideration for the 8 1/8% notes of 101.604% of the principal amount tendered (the applicable redemption price until Feb. 1, 2005, plus 25 basis points), and will offer cash consideration for the 9% notes of 103.25% of the principal amount tendered (the applicable redemption price until Nov. 1, plus 25 basis points), with all tendering holders of both series of notes also to receive accrued and unpaid interest.

Completion of the tender offers for the three series of notes and the consent solicitation for the 12% notes will be subject to various conditions, including - but not limited to - Revlon Consumer Products Corp obtaining the required consents in the consent solicitation, as well as its completion of certain financing transactions.

As a condition to the tender offers, Revlon said it expects to get a new $680 million credit facility with a consortium of banks, which will replace its $312 million credit facility. The new facility is expected to be executed concurrently with the consummation of the tender offers, and it is expected that a portion of the amounts borrowed will be used to purchase notes and to repay the existing credit facility. The new facility is expected to consist of a term loan and a multi-currency revolver.

In addition, as a condition to the tender offers, Revlon expects to issue $400 million of new senior unsecured debt in a Rule 144A transaction. A portion of the net proceeds, together with borrowings under the new credit facility, will be used by Revlon to purchase notes in the tender offers, to repay amounts outstanding under the old credit facility, and to pay fees and expenses.

Revlon further said that after completion of the tender offers and the 12% consent solicitation, it intends to redeem any 8 1/8% notes, the 9% notes and/or the 12% notes that might remain outstanding following the tender offers. If called for redemption, the notes will be called at the redemption prices set forth in their respective indentures.

Citigroup Global Markets Inc. is acting as dealer manager for the tender offers (call 800 558-3745 or collect at 212 723-6106). D.F. King & Co. Inc. is the information agent for the offers (call 800 949-2583 or collect at 212 269-5550).

Holders of the 12% notes may obtain a hypothetical quote of the consideration to be paid by calling either the dealer manager or the information agent.

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