Vector Group launches tender offer, solicits consents for 11% notes

By Marisa Wong

Madison, Wis., Jan. 29 - Vector Group Ltd. began a cash tender offer on Tuesday for any and all of its outstanding $415 million of 11% senior secured notes due 2015, according to a company press release.

The company is also soliciting consents from holders to amend the 11% notes. The proposed amendments would eliminate substantially all of the restrictive covenants and some events of default and other related provisions contained in the notes' indenture.

Holders of a majority in principal amount of the outstanding notes must give consents in order for the proposed changes to be adopted.

Holders who tender their notes and deliver their consents by 11:59 p.m. ET on Feb. 11, the consent expiration time, will receive the total consideration of $1,042.92 per $1,000 principal amount of notes. The total consideration includes a $30.00 consent payment.

Holders who tender and consent after the consent expiration time will receive the tender offer consideration of $1,012.92, which is the total consideration less the consent payment.

The company will also pay accrued interest up to, but not including, the applicable settlement date.

The early settlement date is expected to occur right after the consent expiration time, and the final settlement date will follow soon after the expiration time.

The tender offer and consent solicitation are scheduled to expire at 12:01 a.m. ET on Feb. 27.

Tendered notes may be withdrawn at any time prior to 11:59 p.m. ET on Feb. 11 but not after.

The tender offer and consent solicitation are conditioned upon completion of a debt financing transaction, tenders by holders of a majority in principal amount of the outstanding notes and execution of a supplemental indenture adopting the proposed amendments.

On the early settlement date or, if the early settlement date does not occur, the final settlement date, the company intends to issue a notice of redemption for any notes not tendered in the offer.

Vector Group announced separately on Tuesday that it is offering $375 million of senior secured notes due 2021. Proceeds will be used to help fund the tender offer and possible redemption.

The company said the purpose of the tender offer is to improve its financial position by acquiring any and all of its outstanding notes and, together with the new debt financing transaction, extend the maturity of its debt.

Jefferies & Co., Inc. (888 708-5831 or 203 708-5831) will act as dealer manager for the tender offer and as solicitation agent for the consent solicitation.

i-Deal LLC (212 849-3880 for brokers and banks or 888 593-9546 for all others) is the information agent and the tender agent.

Vector Group is a Miami-based holding company that indirectly owns Liggett Group LLC and Vector Tobacco Inc. and directly owns New Valley LLC. The subsidiaries manufacture and market cigarette products.

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