R. H. Donnelly to tender for 9 1/8% '08 notes

R.H. Donnelley Inc. (B1/B+) said Monday (Nov. 25) that it is planning to make a tender offer for all $150 million of its outstanding 9 1/8% senior subordinated notes due 2008, and will also begin a related solicitation of noteholder consents to proposed changes in the notes' indenture.

The Purchase, N.Y. -based directory publishing company, a subsidiary of R.H. Donnelley Corp., said that it anticipates that the tender offer purchase price (including any related consent payment) will be par plus accrued interest up to the date of repurchase, and that completion of the tender offer will be conditioned upon - among other things - the consummation of the pending acquisition by Donnelly of the Sprint Publishing and Advertising business and related financings.

The exact terms and conditions of the tender offer and exit consent solicitation will be specified in, and are qualified in their entirety by, the tender offer and consent solicitation statement and related materials that will be distributed to holders of 2008 notes.

The tender offer will be financed with a portion of the expected proceeds of the parent company's $925 million two-part Rule 144A offering of senior notes and senior subordinated notes. Donnelley will also use portions of the bond sale proceeds to partially finance the acquisition of the Sprint directory publishing business and to repay existing senior debt.

U.S. Industries completes tender offer for 7¼% '06 notes

U.S. Industries Inc. said on Monday (Nov. 25) that it has accepted for payment $54.763 million in aggregate principal amount of its 7¼% senior notes due 2006 that were validly tendered in the company's previously announced tender offer and related solicitation of noteholder consents to proposed changes in the notes' indenture. The tender offer expired as scheduled on Friday (Nov. 22) U.S. Industries said it would promptly deposit with Wells Fargo Bank Minnesota, NA, U.S. Industries' depositary for the offer, payment for the accepted 2006 notes.

The company said that the successful consummation of the tender offer has completed its plan to reduce its overall debt and extend the maturities of its bank credit facility and 7 1/8% senior notes due 2003 (a separate exchange offer for those notes was completed earlier this month).

U.S. Industries said that asset sales and cash flow, along with the tender offer and the exchange offer for the 2003 notes have enabled it to reduce its outstanding debt by approximately $743 million since June 2001. U.S. Industries' bank credit facility now becomes due on Oct. 4, 2004 and in the exchange offer for its 2003 notes, approximately 96% of the holders tendered their notes in exchange for 11¼% senior notes due 2005. Cash held in escrow for the 2003 notes was used to reduce the outstanding principal of those 2003 notes by approximately $105 million. U.S. Industries said it has substantially reduced its interest expense as a result of the debt restructuring, and has enhanced its flexibility to further refinance or to repay its debt in full over time.

Georgeson Shareholder Communications Inc. - which also acted as information agent for the separate exchange offer for U.S. Industries' 7 1/8% notes - was the information agent for the tender offer and the related consent solicitation for the 7¼% notes as well (banks and brokers should call collect at 212 440-9800; all others should call toll- free at 866 807-2995).

AS PREVIOUSLY ANNOUNCED, U.S. Industries, a West Palm Beach, Fla.-based company which makes and markets branded bath and plumbing products, as well as vacuum cleaners for the consumer market, announced on Oct. 4 its intention of making a tender offer to purchase at par its outstanding 7¼% senior notes due 2006 in an aggregate principal amount equal to the balance in the cash collateral account allocable to those notes.

U.S. Industries said it would simultaneously make a related consent solicitation to amend the applicable Indenture to allow U.S. Industries to pay the tender offer consideration to tendering holders from the cash collateral account on a pro-rata basis, based on the amount of notes tendered relative to the outstanding amount of notes, and to provide that U.S. Industries would make future offers to purchase 7¼% notes with cash from the cash collateral account when the balance allocable to those notes equals or exceeds 10% of the outstanding notes. It said the tender offer for the 7¼% notes would, among other requirements, be conditioned upon the consummation of a separate exchange offer for its 7 1/8% senior notes due 2003 notes, among other conditions (that offer to exchange cash and new notes for all of its outstanding 7 1/8% notes, which began on Sept. 9, expired as scheduled at midnight ET on Nov. 1 with 96% of the outstanding notes having been tendered and accepted for exchange by the company).

On Oct. 24, U.S. Industries said that it had begun the previously announced offer to purchase for up to $54.8 million in aggregate principal amount of its outstanding 7¼% notes for cash, with the offer set to expire at 12 midnight ET on Nov. 22, subject to possible extension.

The company said that the actual aggregate amount of cash to be paid to all holders tendering notes under the offer would depend on the total amount of notes tendered. In any event, U.S. Industries said it would only purchase 43.84% of the tendered 7¼% notes, on the terms and subject to the conditions of the offer. It said consideration would be 100% of the principal amount of the notes accepted and purchased in the offer.

U.S. Industries also said that in connection with its offer, it was soliciting consents from the noteholders to proposed indenture changes, as previously outlined. It set the consent date as 12 midnight ET on the later of EITHER Thursday (Nov. 7) OR the date on which holders of a majority of the 7¼% notes were to deliver their consents to the proposed indenture amendment, with the consent deadline being subject to possible extension.

U.S. Industries said that the tender offer and consent solicitation would be subject to certain conditions, including receipt of the requisite consents to the indenture amendment, consummation of the amended exchange offer and consent Solicitation for U.S. Industries' outstanding 7 1/8% notes and the approval of U.S. Industries' senior secured lenders allowing U.S. Industries to pay the consideration in respect of the Offer and to make such future offers to purchase as described in the amendment to the indenture.

On Nov. 8, U.S. Industries said that it had received tenders and related consents, from a majority of the holders of its 7 ¼% notes. As of Nov. 7, approximately $123.8 million of the $125 million principal amount outstanding of the notes, including related consents, had been tendered for purchase. It said that under the terms of the offer, holders could no longer withdraw their tenders of the notes or revoke the related consents.

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