HARTMARX CORP. (HMX) (Caa3/C) said Wednesday (Jan. 16) that it had completed its previously announced exchange offer for its outstanding 10 7/8% senior subordinated notes due 2002, for which it is offering holders a package of new notes, shares and cash. As of midnight ET on Jan. 15, when the offer expired as scheduled without further extension, $31.705 million of the notes, or 91.2% of the outstanding principal amount, had been validly tendered for exchange and not subsequently withdrawn, and all had been accepted for payment. Under the previously publicized terms of the offer, the company will issue to tendering noteholders $25.364 million principal amount of new notes and 2,948,565 shares, and will pay them a total of $6.341 million in cash. AS PREVIOUSLY ANNOUNCED, Hartmarx, a Chicago-based apparel company, said on Dec. 17 that it had begun an exchange offer for all of its outstanding 10 7/8% notes on Dec. 14, initially offering a combination of $850 million principal amount of newly issued 12 ½% senior subordinated notes due 2005 and $150 cash per $1,000 principal amount of the existing notes, terms which were subsequently modified. It initially set midnight ET on Jan. 14 as the expiration deadline, which was subsequently extended. Hartmarx said that holders of the existing notes accepted for exchange would receive the amount of interest due and payable on the existing notes on Jan. 15. Hartmarx said it had also amended its senior credit facility to modify certain covenants and waive certain existing defaults under the credit facility, effective upon the completion of the exchange offer. The company said it had undertaken the exchange offer in order to extend the maturity of the senior subordinated debt, and had amended the senior credit facility in order to "provide the necessary time and flexibility to implement our business plan in the currently difficult retail environment." It said completion of the exchange offer would be subject to at least 90% of the outstanding principal amount of the existing notes having been tendered and not withdrawn prior to the offer's expiration date, among other conditions. On Jan. 2, Hartmarx announced that it had amended the terms of the exchange offer, and had extended the offer to expire at midnight ET on Jan. 15, subject to possible further extension. Hartmarx changed the composition of the debt and cash package it was offering noteholders to $800 principal amount of new notes and $200 in cash per $1,000 principal amount of the existing notes (from $850 in new notes plus $150 cash previously) and additionally offered to issue 93 shares of Hartmarx common stock (par value $2.50) per $1,000 principal amount of the existing notes. It said that completion of the exchange offer would result in the issuance of 3,229,425 Hartmarx shares to the holders of the existing notes (assuming full participation in the exchange offer). The amended terms were decided upon following discussions between the company and its noteholders. Hartmarx further announced on Jan. 10 that the new notes being offered in the exchange package would now be senior unsecured notes, subordinated only to Hartmarx's senior bank debt, instead of the previously proposed senior subordinated notes, which would have also been subordinated to other forms of indebtedness as well as the senior bank debt. All other terms of the exchange offer were left unchanged. Hartmark made the change in the subordination status of the new notes following discussions with its largest bondholder, which held approximately 67% of the outstanding notes, and with its senior lenders. The largest bondholder indicated to Hartmarx its intention of tendering its holding of existing notes under the exchange offer. D. F. King & Co., Inc. (800 290-6429) was the information agent for the offer. Bank One Trust Co., NA (800 524-9472) was the exchange agent.

CONSECO, INC. (CNC) (B2/B) said Wednesday (Jan. 16) that it had repurchased an additional $34 million of public debt maturing in 2002 since its last previous debt repurchase report to investors on Dec. 6. The latest repurchase brings the total amount of 2002 maturities retired early to $266 million, consisting of $148 million for Conseco, Inc. and $118 million for its subsidiary CONSECO FINANCE CORP. which have been repurchased since June 30, 2001. All of the most recently retired debt had been issued by Conseco Finance. The total amount retired represents 30% of all Conseco and Conseco Finance public debt due in 2002. The company confirmed that these transactions have all occurred at a discount to face value, but it did not disclose the average discount. Following the latest transactions, a total of $598 million of Conseco Inc. and Conseco Finance public debt scheduled to mature in 2002 remains outstanding, consisting of $302 million of Conseco, Inc. public debt in a single issue that matures in October, and $296 million of Conseco Finance public debt, approximately $125 million of which matures in June, with the balance (about $171 million) maturing in September. AS PREVIOUSLY ANNOUNCED, Conseco, a Carmel, Ind.-based insurer, began buying back portions of the $864 million of public debt maturing in 2002 ($450 for Conseco Inc. and $414 million for Conseco Finance as of June 30, 2001) in several transactions last year. It said Oct. 30 that it had bought back $49 million of its public debt in the quarter ended Sept. 30, and another $75 million of debt during October ($124 million total). Conseco at the time did not elaborate as to whether those figures represented face amounts of repurchased debt, as turned out to be the case, or total figures it spent to buy back more than face amount at a discount, nor did it specify which of its public debt issues it had repurchased. Conseco further reported on Dec. 6 that during the month of November, it had repurchased an additional $108 million of public debt scheduled to mature in 2002. The company said that $83 million of the newly repurchased debt had been issued by parent Conseco, while $25 million had been issued by Conseco Finance. Those repurchases, combined with the previously announced purchases of 2002 maturity debt, brought the total amount bought back in the third quarter ended Sept. 30 and the following two months to $232 million ($148 million from Conseco Inc. and $84 million from Conseco Finance), representing 27% of the two companies' debt which is to mature in 2002 and leaving outstanding at that time $632 million ($302 million from Conseco Inc. and $330 million from Conseco Finance).

McLEODUSA INC. (MCLD) (Ca/C) said Wednesday (Jan. 16) that it was continuing its discussion with its senior noteholders in an effort to win their support for its previously announced exchange offer for the notes and related consent solicitation and solicitation of recapitalization plan acceptances, but could give no assurances that such talks would result in an agreement. It extended the deadline for the exchange offer to 5 p.m. ET on Jan. 30 from the original Jan. 15 deadline. As of 5 p.m. ET on that original deadline, the company had received tenders from the holders of approximately $82.054 million of the nearly $3 billion of notes being tendered for, well under the required 95% participation threshold. McLeodUSA also said that holders of a total of approximately $956.185 million of the notes had informed the company that they did not intend to tender their notes under the exchange offer and did not intend to consent to the recapitalization plan. The company further announced that it had not paid the scheduled Jan. 1 interest payment on its $750 million of 11 3/8% senior notes due 2009, nor had it made the interest payments which came due Jan. 15 on its $150 million of 12% senior notes due 2008 and its $225 million of 9¼% senior notes due 2007. McLeodUSA invoked the 30-day "grace period" for non-payments contained in the notes' indentures. AS PREVIOUSLY ANNOUNCED, McLeodUSA, a Cedar Rapids, Iowa-based telecommunications company said on Dec. 3 that it would undertake a comprehensive recapitalization and financial restructuring plan, which would include an exchange offer for the company's $2.935 billion of outstanding bond debt. It said that under terms of the planned restructuring, it would offer the bondholders at least $560 million of cash, plus about 14% of the new common stock of the revamped company. $535 million of the cash payment would be funded from the net proceeds of the planned sale of McLeodUSA's telephone directory business to Forstmann, Little & Co., and the remaining $25 million would come from a new equity investment by Forstmann Little. McLeodUSA said it would seek a requisite 95% of bondholder acceptances of the exchange offer. It said it might pursue its restructuring via a pre-packaged Chapter 11 filing. McLeod said the elimination of the bond debt would save the company some $300 million in annual interest expense. It initially set forth no timetable for the prospective bond exchange offer and the related restructuring. McLeodUSA announced on Dec. 7 that it had filed documentation with the Securities and Exchange Commission on the planned debt exchange offer and related consent solicitation, and that the offering memorandum and supporting documents would be distributed to all of its bondholders and will be available for information purposes via the EDGAR on-line SEC filing system. McLeodUSA also said that it has been contacted by an informal committee of bondholders, and had initiated discussion with the committee and its advisors with an eye toward effecting the recapitalization. It said that at the committee's request, McLeodUSA canceled the bondholder conference call that had been scheduled for Dec. 11. McLeodUSA also said it expects to complete the recapitalization transaction during the first or second quarter of 2002. In its SEC filing, McLeodUSA outlined the specifics of the debt exchange offer, which covers the aforementioned 11 3/8%, 12% and 9¼% senior notes, as well as the company's approximately $495 million (face amount) zero-coupon/10½% senior discount notes due 2007; its approximately $215 million 11½% senior notes due 2009; its approximately $300 million 8 3/8% senior notes due 2008; its approximately $300 million of 9½% senior notes due 2008; and its approximately $500 million of 8 1/8% senior notes due 2009. In exchange for the notes, McLeodUSA said it would offer the noteholders up to $560 million in cash plus 56,813,984 shares of common stock (assuming 100% noteholder participation), representing 13.7% of the company's equity after the recapitalization. McLeodUSA was also soliciting noteholder consents to proposed indenture amendments aimed at eliminating or amending substantially all of the restrictive covenants in the notes' indenture, and was also seeking noteholder acceptances for the overall recapitalization transaction, which includes the possibility of a Chapter 11 filing to effect the recapitalization. The exchange offer is conditioned on 95% of the $2.935 billion notes being tendered to the company, and its receipt of noteholder consents from the holders of at least a majority of the notes. Tendering noteholders are assumed to automatically be consenting to the indenture changes and recapitalization plan. The offer is further conditioned upon the sale of McLeod's directory business for at least $535 million; the sale of $100 million of new preferred shares and warrants to Forstmann Little; the approval of the company shareholders for certain elements of the recapitalization transaction; and satisfactory resolution of tax matters related to the capitalization. Innisfree M&A Inc. (888 750-5834; banks and brokers call collect at 212 750-5833) is the information agent for the exchange offer and solicitation; The Bank of New York is the depositary.

FRESENIUS MEDICAL CARE AG (FMS) (Ba1/B+) said Wednesday (Jan. 16) that it will redeem all of its $360 million of outstanding 9% Trust Preferred Securities due 2006. The Bad Homburg, Germany-based company - the world's largest provider of dialysis products and services - will redeem the securities on Feb. 14. at a price of $1,045 per $1,000 liquidation amount, plus accrued distributions of $18.25 per $1,000, for a total redemption price of $1,063.25 per $1,000. Fresenius will fund the redemption from its senior credit facility, and expects to achieve interest savings from the redemption. The redemption transaction is being handled via State Street Bank and Trust Co. as trustee.

BDK HOLDINGS, INC. said Wednesday that it had begun an offer to exchange to exchange its new 9% senior notes due 2007 and shares of its common stock, for all of its $33.75 million outstanding 8.5% senior notes, which are scheduled to mature on Feb. 13. The offer is scheduled to expire at 12 p.m. ET on Feb. 13, subject to possible extension. Burbank, Calif.-based BDK said that holders whose tenders of the existing notes are accepted will receive $307.89 principal amount of the new notes and a proportional amount of 777,000 shares of BDK common stock per $1,000 principal amount of the existing notes. The exchange offer is conditioned upon receipt by BDK of tenders of at least 95% of the outstanding existing notes, its success in obtaining additional financing, and other customary conditions.

IMC GLOBAL INC. (IGL) (Ba2/B+) said Tuesday (Jan. 15) that it had completed its previously announced tender offer for its outstanding 7.40% notes due 2002, which expired as scheduled without extension. As of that expiration, holders of approximately 99% of the outstanding $300 million of the notes had validly tendered them and had delivered consents to proposed indenture changes. IMC Global accepted all of the validly tendered notes, and settlement of the transaction was planned for that same day. Total consideration for the notes was $1,037.28 per $1,000 principal amount, plus accrued and unpaid interest. The total consideration included a consent payment for holders who consented to the indenture change by tendering their notes by the now-passed consent deadline. The premium the company paid to its noteholders over the principal amount, along with associated fees, will be reflected as an extraordinary item in the 2001 fourth quarter. AS PREVIOUSLY ANNOUNCED, IMC Global, a Lake Forest, Ill.-based maker of agricultural chemicals, said on Dec. 14 that it had begun a tender offer for all of its outstanding 7.40% notes, and set 5 p.m. ET on Jan. 14 as the expiration deadline. It also began soliciting noteholder consents to indenture amendments eliminating substantially all of the restrictive covenants, and set 5 p.m. ET on Dec. 28 as the consent deadline. IMC said it would purchase the notes at a price based on a 50 basis point fixed spread over the yield to maturity of the reference security, the 5.75% U.S. Treasury note due this coming Oct. 31, as determined on Dec. 26, the twelfth business day preceding the expiration date of the offer. The total consideration would include a consent payment equal to 0.5% of the principal amount (i.e., $5 per $1,000) for those holders tendering by the consent deadline. Holders tendering after the consent deadline would not be entitled to receive the consent payment as part of their consideration. All holders would be entitled to also receive unpaid and accrued interest. The offer was conditioned upon, among other things, the receipt of the requisite consents to adopt such proposed amendments. J.P. Morgan Securities Inc. was the dealer manager for the tender offer and consent solicitation. The information agent and the depositary was Bondholder Communications Group.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC. (CRL) said Tuesday (Jan. 15) that its wholly-owned CHARLES RIVER LABORATORIES, INC. (Ba3/B) subsidiary was beginning a cash tender offer for any and all of its outstanding $79.7 million of 13.5% senior subordinated notes due 2009. Charles River, a Wilmington, Mass.-based provider biomedical products and services, including animals for medical laboratory research, said the offer would commence on Wednesday (Jan. 16) and would expire at 9 a.m. ET on Feb. 14, subject to possible extension. It also began a related solicitation of noteholder consents to proposed indenture changes which would eliminate certain restrictive provisions, and said the consent date would be the later of Jan. 30 or the date on which holders of a majority of the outstanding notes had duly executed the consents, subject to possible extension. Charles River said it would purchase the outstanding notes at a price to be determined three business days prior to the expiration date of the tender offer (Feb. 11 is the tentative price-setting date), based upon a fixed spread of 75 basis points over the yield to maturity of the reference security, the 6% U.S. Treasury Note due Aug. 15, 2004, plus accrued and unpaid interest up to, but not including, the payment date. The total consideration will also include a consent payment of $13 per $650 principal amount of the notes (the original principal amount of $1,000 having been reduced as a result of the company's August, 2000 exercise of an option to redeem 35% of the total principal amount), which will be paid to those holders who validly consent to the proposed indenture changes by tendering their notes by the aforementioned consent date. Tendered notes may not be withdrawn and consents may not be revoked after such time and date except in certain limited circumstances. Payment for validly tendered notes is expected to be made promptly following the expiration of the tender offer. Charles River plans to fund the tender offer and consent solicitation out of the proceeds of its separately announced offering of $150 million of 20-year senior convertible debentures. Credit Suisse First Boston Corp. (212 538-8474 or 800 820-1653) is dealer manager in connection with the tender offer and solicitation of consents. The Information Agent is MacKenzie Partners, Inc. (call collect at 212 925-5500), and the Depositary is State Street Bank.

RITE AID CORP. (RAD) (Caa2/B-) said Tuesday (Jan. 15) that it had bought back $22.7 million of its 6% dealer remarketable securities due 2003 during the 13 weeks ended Dec. 1. The Camp Hill, Pa.-based drugstore chain operator made the disclosure in its 10-Q report filed with the Securities and Exchange Commission. It did not disclose further details of the transaction(s), including the amount it spent on repurchasing the securities or whom they were purchased from. RiteAid said that as of Dec. 1, some $85.1 million of the securities remained outstanding.

KAISER ALUMINUM CORP. (KLU) (B3/CCC) said Tuesday (Jan. 15) that it will begin discussions within the next few weeks with its note holders regarding potential restructuring of its $174 million of outstanding 9 7/8% senior notes due 2002, its $225 million of outstanding 10 7/8% senior notes due 2006 and its $400 million of outstanding 12¾% senior subordinated notes due 2003, in light of current and anticipated business and capital market conditions. The Houston-based aluminum producer cited near-term debt maturities as one of a number of factors negatively affecting its earnings and cash flow (others cited included weak market demand exacerbated by the events of September 11 and low aluminum prices, coupled with significant ongoing legacy obligations).

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