Affinion amends exchange offer, gets needed consents to amend notes

By Susanna Moon

Chicago, Nov. 22 - Affinion Group Holdings, Inc. said it amended the exchange offer for its $325 million of outstanding 11 5/8% senior notes due 2015.

The company reduced the minimum tender condition to $292.5 million, or 90%, of the 11 5/8 notes, according to a press release.

Prior to the change, the minimum tender condition was $300,625,000, or 92.5%, of the notes.

In addition, Affinion Investments, LLC, a wholly owned subsidiary of Affinion Group, Inc., is offering to exchange its $355.5 million of outstanding 11½% senior subordinated notes due 2015.

The minimum tender condition for the 11½% notes remains $319.95 million, or 90% of the notes.

As of 5 p.m. ET on Nov. 21, the consent date, holders had tendered $292.7 million principal amount, or 90.1%, of the 11 5/8% notes and $352.9 million principal amount, or 99.3%, of the 11½% notes, which now satisfies the minimum tender condition.

In addition, the companies obtained the needed consents to amend the notes, and Affinion Group obtained the consent of its lenders to an amendment to its senior secured credit facility, which was another condition to the offer.

As previously announced, the total exchange value for each $1,000 principal amount of 11 5/8% notes tendered by the early tender deadline will be $1,000 of Affinion Group's 13¾%/14½% senior secured pay-in-kind toggle notes due 2018, series A warrants for 46.1069 shares and series B warrants for 239.8612 shares.

For 11 5/8% notes tendered after the early deadline, the exchange value will be $950 of toggle notes, series A warrants for 46.1069 shares and series B warrants for 239.8612 shares.

The total exchange value per $1,000 par amount of 11½% notes tendered by the early deadline will be $1,020 of Affinion Investments' 13½% senior subordinated notes due 2018.

Holders who tender their 11½% notes after the early deadline will receive $1,000 of new 13½% notes.

The companies also will pay accrued interest to but excluding the settlement date.

On Nov. 7, some noteholders, including affiliates of Ares Management, LLC and investment funds affiliated with or managed by Angelo, Gordon & Co., which collectively held about $246 million, or 76%, principal amount of 11 5/8% notes and about $182 million, or 51%, principal amount of 11½% notes, agreed to tender their note in the exchange offers.

Consent solicitation

The companies are soliciting consents to amend the notes to remove substantially all of the restrictive covenants and some default provisions in the note terms.

Holders tendering their notes must also deliver consents.

The proposed amendments required the consent of holders of at least a majority of the outstanding principal amount of each series of notes, not including those held by affiliates of Affinion, which was satisfied by the early tender deadline.

The offers will end at 5 p.m. ET on Dec. 9. They began Nov. 7.

The companies said the purpose of the exchange offers and consent solicitations is to extend the maturities of the existing notes and to eliminate the requirement to pay cash interest.

The information and exchange agent is D.F. King & Co., Inc. (800 848-3416, 212 269-5550 for dealers and brokers or affinion@dfking.com).

Affinion is a Norwalk, Conn.-based provider of marketing services and loyalty programs.

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