Harland Clarke gets tenders to amend 6 5/8% notes issued by Valassis

By Susanna Moon

Chicago, Jan. 21 - Harland Clarke Holdings Corp. said holders had tendered $241.6 million principal amount, or 93.4%, of the $258.9 million outstanding principal amount of 6 5/8% senior notes due 2021 issued by Valassis Communications, Inc.

The tally is as of 5 p.m. ET on Jan. 17, the early tender date, and the company entered into a supplemental indenture to amend the notes, according to a company news release.

The tender offer will continue until 11:59 p.m. ET on Feb. 3.

As previously announced, the offer is being conducted in connection with Harland Clarke's upcoming acquisition of Valassis. The offer began Jan. 6.

Harland Clarke is soliciting consents to amend the notes indenture so that the acquisition does not count as a change of control and, accordingly, does not trigger the requirement to make an offer to purchase all of the notes.

Consents were needed from the holders of a majority of the outstanding notes in order to make the amendments. Notes will not be accepted for purchase unless they are accompanied by a consent.

Harland Clarke is offering $1,017.50 per $1,000 principal amount of notes. This payment includes a $30.00 early tender premium for each note tendered by the early tender deadline.

Holders will also receive accrued interest up to but excluding the settlement date.

The completion of the tender offer is conditioned on completion of the acquisition, the receipt of tenders for at least a majority of the outstanding notes and the execution of a supplemental indenture implementing the proposed amendments.

The completion of the tender offer and consent solicitation is not a condition to the acquisition.

The company previously said it expected some financing transactions related to the acquisition to be launched following the early tender date. The tender offer is being made at this time in order to help the company determine the principal amount of those financing transactions, the company previously said.

Harland Clarke was looking to get a $150 million asset-based revolving credit facility due Feb. 20, 2018 in addition to its previously announced fungible $500 million first-lien covenant-light incremental term loan B-3 (B1/B+) due May 2018, as previously reported by Prospect News.

Also, the company plans to start a roadshow on Wednesday for an $865 million two-part offering of high yield notes, also as previously reported by Prospect News.

The lead dealer manager and lead solicitation agent is Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-2147). BofA Merrill Lynch and Citigroup Global Markets Inc. are the joint dealer managers. The tender agent and information agent is D.F. King and Co., Inc. (212 269-5550 collect, for banks and brokers only, or 800 488-8035).

Harland Clarke is a San Antonio-based provider of payment, marketing and security services. Valassis is a Livonia, Mich.-based provider of media solutions.

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