99 Cent Only proposes amendments to $250 million of 11% senior notes

By Tali David

Minneapolis, Sept. 18 - 99 Cent Only Stores, Inc. commenced a consent solicitation to amend the indenture governing its $250 million of 11% senior notes due 2019, according to an 8-K filed with the Securities and Exchange Commission.

99 Cent said that its parent, Number Holdings, Inc., is in discussions with some former managers, Eric Schiffer, Jeff Gold and Howard Gold, and Karen Schiffer and The Gold Revocable Trust dated October 26, 2005, about a proposed agreement under which Number Holdings would purchase all the managers' class A and class B stock along with their stock options for a total of $130 million.

The consent solicitation is to amend the note indenture to allow the transaction.

Specifically, the proposed amendments would (a) eliminate the leverage ratio test currently required to make a permitted restricted payment under the indenture for the purpose of funding the obligation to repurchase shares pursuant to the rollover investor put; and (b) expand the definition of the rollover investor put to include the purchase.

The consent deadline is 5 p.m. ET on Sept. 26.

Holders who consent will receive a cash payment of $2.50 per $1,000 principal amount of notes.

To make the changes, 99 Cent needs approval from holders of a majority of the notes.

RBC Capital Markets, LLC (877 381-2099 or 212 618-7822) is the solicitation agent. D.F. King & Co. is the information agent (800 967-4607 or 212 269-5550).

99 Cent is a City of Commerce, Calif.-based operator of extreme-value retail stores.

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