Spencer Spirit: 100% of 11% notes tendered; offer for 9%/9¾% PIK toggle notes canceled

By Toni Weeks

San Luis Obispo, Calif., July 8 – Spencer Spirit Holdings, Inc., Spencer Gifts LLC and Spirit Halloween Superstores LLC announced they have taken in tenders for $175 million, or 100%, of the $175 million of outstanding 11% senior secured notes due 2017 as of July 8 in the tender offer for the notes, according to a press release.

As a result, holders of the notes have unanimously consented to the proposed amendments to the indentures governing the notes. The issuers were soliciting consents to amend the note indenture to, among other things, eliminate a significant portion of the restrictive covenants and eliminate certain events of default and release all of the collateral securing the 11% securities.

In addition, SSH Holdings, Inc. announced it has canceled the tender offer for any all of its $165 million of 9%/9¾% senior pay-in-kind toggle notes due 2018.

According to the release, the conditions to the tender offer were not satisfied, requiring the cancelation of the offer for the PIK toggle notes. All of these notes that have already been tendered will be returned “promptly” to the tendering holders.

As a result of the cancelation of the PIK toggle note tender offer, the proposed amendments to the indenture governing the notes, which would have deleted or modified some covenants and provisions in the indenture, will not be approved.

The consent solicitations expired at 5 p.m. ET on June 23. The initial settlement date was June 30.

The tender offers were set to expire at 12:01 a.m. ET on July 9, but the companies announced on Tuesday that it is extending the tender deadline for the 11% notes to 12:01 a.m. ET on July 16.

As previously announced, for each $1,000 principal amount, the companies are offering a total consideration $1,062.50 for the 11% notes, including a consent payment of $30.00 for those who participate prior to the consent deadline.

For the PIK toggle notes, the price would have been $1,025.00, which also included the $30.00 consent payment.

Spencer Spirit will also pay accrued interest.

The companies needed tenders from holders of at least 66 2/3% aggregate principal amount of the 11% notes to release the collateral securing the notes and of at least a majority aggregate principal amount for the PIK toggle notes.

The offers are contingent on financing in an amount sufficient to pay for the tender offer and related fees and expenses. Spencer Spirit Holdings launched a $360 million term loan on June 11, as previously reported by Prospect News.

Wells Fargo Securities, LLC (866 309-6316 or call collect 704 410-4760) and Credit Suisse Securities (USA) LLC (800 820-1653 or call collect 212 538-2147) are the dealer managers and solicitation agents.

The tender agent and information agent is D.F. King & Co., Inc. (800 714-3312 or 212 269-5550 for banks and brokers; ssh@dfking.com).

Spencer Spirit operates a mall-based specialty retailer and is based in Egg Harbor Township, N.J.

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