Spirit wraps exchange for two bond series, prorated at 79.7%, 52.1%

By Susanna Moon

Chicago, Nov. 4 - Spirit Parent Ltd. said investors tendered for exchange £126,204,000 of class A1 debenture bonds due 2028 and £107,763,000 of class A3 debenture bonds due 2021 in the offer that ended at 11 a.m. ET on Nov. 1.

Of the tendered bonds, the company set the acceptance amount at £101,293,000, or 70%, of the outstanding class A1 bonds and at £58,352,000, or 50%, of the outstanding class A3 bonds, according to a company press release.

The proration factor was 79.7% for the class A1 bonds and 52.1% for the class A3 bonds.

In the exchange offer, the company offered a like amount of new debenture bonds for Spirit Issuer plc's £144,704,000 of outstanding £150 million class A1 bonds and £116,704,000 of outstanding £150 million class A3 bonds.

The company also will pay accrued interest in cash.

As previously announced, holders of class A1 debenture bonds will receive class A6 debenture bonds, and holders of class A3 debenture bonds will receive class A7 debenture bonds.

The A1 and A3 debenture bonds form part of the whole business financing of Spirit Pub Co. (Managed) Ltd. and Spirit Pub Co. (Leased) Ltd., indirect subsidiaries of Spirit Parent.

The company previously said it was conducting the offer to extend the current amortization profile of the securities.

The new class A6 bonds will have a coupon of Libor plus 180 basis points, while the class A7 bonds will accrue interest at 5.86% until December 2014, after which the coupon will be Libor plus 395 bps. For both new series, there will be a 150 bps margin step-up and a full cash sweep beginning September 2018.

The exchange offer was contingent upon tenders from holders of at least 70% of the class A1 bonds and at least 50% of the class A3 bonds.

The offer was also conditioned on ratings for the new bonds being confirmed. The company said on Monday that it expects the rating agencies to assign the expected credit ratings to the two series of bonds and that there will be no downgrade of the credit ratings of the existing bonds.

Holders had to tender at least £100,000 principal amount in order to participate.

Settlement has been set for Nov. 7.

The dealer manager is Goldman Sachs International (44 20 7774 9862; liabilitymanagement.eu@gs.com, attn: Liability Management Group). The tender agent is Deutsche Bank AG, London Branch (44 20 7547 5000; xchange.offer@db.com).

Spirit Pub Co. plc is a Staffordshire, England-based managed and leased pub business.

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