Service Corp., Stewart tender, seek consents for three note series

By Susanna Moon

Chicago, April 28 - Service Corp. International and Stewart Enterprises, Inc., a wholly owned subsidiary of the company, began cash tender offers for three series of outstanding senior notes.

Service Corp. began cash tender offers for $136,465,000 principal amount outstanding of its 6¾% senior notes due 2015 and $250 million principal amount outstanding of its 7% senior notes due 2019.

Stewart began a cash tender offer for $200 million principal amount outstanding of its 6½% senior notes due 2019.

The total purchase price for each $1,000 principal amount tendered by 5 p.m. ET on May 9, the consent payment date, will be $1,054.27 for the 6¾% notes, $1,067.64 for the 7% notes and $1,052.50 for the 6½% notes.

The total amount includes an early tender payment of $30 per $1,000 principal amount.

Those who tender after the consent date will receive the total amount less the early premium.

The tender offers will end at midnight ET on May 23.

The company also will pay accrued interest to the payment date, which will be May 12 for early tendered notes.

Tendered notes may be withdrawn by the early tender date.

Service Corp. said it will accept tenders of the 6¾% notes in principal amounts of $1,000 and integral multiples of $1,000 after that and tenders of the 7% notes in principal amounts of $2,000 and integral multiples of $1,000 after that. Stewart will accept tenders of the 6½% notes in principal amounts of $2,000 and integral multiples of $1,000 after that.

The companies also are soliciting consents to authorize the elimination of most of the restrictive covenants and events of default and to reduce the notice period required in connection with a redemption of the notes, according to a press release by Service Corp.

Holders may not tender their notes without delivering their consents and may not deliver consents without tendering their notes.

Each company is seeking consents to the proposed amendments to the notes indenture as a single proposal for each series of the notes.

The company plans to use proceeds from a proposed $550 million debt financing, along with borrowings under its revolving credit facility and cash on hand, to fund the tender offers and consent solicitations.

The offers are conditioned on the company obtaining at least $550 million from a proposed debt financing, receipt of required consents to authorize the proposed amendments and execution of a supplemental indenture.

After settlement, the companies plan to redeem any notes that remain outstanding after the offers end.

The information agent for the tender offer and consent solicitation is Global Bondholder Services Corp. (212 430-3774 collect, for banks and brokers, or 866 470-4200). The dealer manager for the tender offer and solicitation agent for the consent solicitation is Wells Fargo Securities, LLC (866 309-6316 and 704 410-4760 collect).

Service Corp. is a Houston-based provider of death care products and services. Stewart is a Jefferson, La.-based death care provider.

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