Staples obtains tenders for all Corporate Express' 8¼%, 7 7/8% notes

By Jennifer Chiou

New York, July 17 - Staples, Inc. said it received tenders for all of the 8¼% senior subordinated notes due 2014 and 7 7/8% senior subordinated notes due 2015 issued by Corporate Express NV subsidiary Corporate Express U.S. Finance Inc.

A total of $150 million of each series of notes was tendered and accepted.

The offer ended at 11:59 p.m. ET on Tuesday.

For each $1,000 principal amount of notes, the company said it paid $1,090.46 for the 8¼% notes and $1,115.33 for the 7 7/8% notes. Holders also received accrued interest up to but excluding the payment date, which was expected to be Thursday.

The payouts included a $30.00 consent fee for every $1,000 principal amount of notes tendered by the consent deadline, which was 5 p.m. ET on June 5.

The tender offer was repriced because Staples extended it from June 27.

The new payouts were determined at 2 p.m. ET on June 30 using the bid-side yield of the 4 7/8% U.S. Treasury note due June 30, 2009 for the 8¼% notes and the 2% U.S. Treasury note due Feb. 28, 2010 for the 7 7/8% notes plus a fixed spread of 50 basis points.

The company previously fixed pricing on June 5. Based on the previously scheduled payment date of June 30, Staples had planned to pay $1,094.35 for the 8¼% notes and $1,117.99 for the 7 7/8% notes.

Staples conducted the tender offer and consent solicitation through its subsidiary, Staples Acquisition BV, in connection with its €3.1 billion offer to acquire Corporate Express, which it is carrying out via an €9.25-per-share tender offer for the company's ordinary shares.

Staples Acquisition sought consents to proposed amendments to the note indentures that would eliminate most of the restrictive covenants, some event-of-default provisions and other provisions.

The tender offer began on May 22 and was conditioned upon, among other things, the receipt of consents from holders of a majority of each series of notes and satisfaction of the conditions to the tender offer for Corporate Express' shares.

As of midnight ET on June 26, holders had tendered 98.67% of the 8¼% notes and 99.73% of the 7 7/8% notes.

Lehman Brothers Inc. (800 438-3242 or 212 528-7581) was dealer manager and solicitation agent, and Georgeson Inc. (866 201-4446) was the information agent.

Staples, an office superstore based in Framingham, Mass., financed the offers with proceeds from a $3 billion credit agreement with Lehman Brothers Inc., Bank of America and HSBC Bank USA, with cash reserves and with borrowings under its revolving credit facility.

Corporate Express is a business-to-business office supply company based in Amsterdam.

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