Riverwood tenders for 10 7/8% of '08, 10 5/8s of '07

RIVERWOOD INTERNATIONAL CORP (B2/B) said on Thursday (May 30) that it had begun cash tender offers for all of its outstanding 10 7/8% senior subordinated notes due 2008 and 10 5/8% senior notes due 2007 (there were two tranches of the latter notes, one issued in July 1997 and the other in June 2001). The company also began soliciting noteholder consents to proposed amendments to the notes' indentures, which would eliminate substantially all of the restrictive covenants, certain repurchase rights and certain events of default and related provisions contained in such indenture. The company set 5 p.m. ET on June 14 as the consent solicitation deadline (subject to possible extension) IF Riverwood has made a public announcement at least one day prior to that date that it has received the requisite consents for each such issue of notes; otherwise, the consent solicitation expiration will be on the first date after June 14 on which Riverwood will have received such consents the day before and will have made a public announcement regarding such receipt. It also set 12 midnight ET on June 26 as the tender offer expiration, subject to possible extension. Riverwood set the tender offer consideration for validly tendered 2007 senior notes at $1,053.13 per $1,000 principal amount of the notes, and set it at $1,040.78 per $1,000 principal amount for the 2008 senior subordinated notes, with all holders also eligible to receive accrued and unpaid interest up to - but not including - the payment date for the notes. Noteholders who validly consent to the proposed amendments on or before the consent expiration deadline will be entitled to a consent payment in the amount of $2.50 per $1,000 principal amount. Holders who tender their notes on or before the consent expiration date are obligated to consent to the related proposed amendments, while holders who consent to the amendments are required to tender their notes in the related offer and may not revoke their consent without withdrawing the tendered notes. Holders who tender their notes after the applicable consent expiration date will not be entitled to receive the consent payment. Tendered notes may be withdrawn and related consents may be revoked at any time on or prior to the consent expiration date for the related offer, but not after that. Riverwood said that it is making a separate offer each issue of notes, and no offer is conditioned on the consummation of any other offer. Completion of each offer is subject to certain conditions, including (1) the consummation of the proposed initial public offering of common stock by Riverwood's corporate parent, RIVERWOOD HOLDING, INC., and the consummation of certain other anticipated financing transactions, in each case on terms satisfactory to Riverwood, and (2) the receipt of the requisite consents to the proposed indenture amendments and the execution of the related supplemental indentures. AS PREVIOUSLY ANNOUNCED, Riverwood Holding, an Atlanta Ga.-based paperboard maker and the corporate parent of Riverwood International Corp., filed a registration statement with the Securities and Exchange Commission on May 3 for an initial public offering of $350 million of its common stock, and said it would also take out an additional term loan under its credit agreement and sell senior notes. Riverwood said the proceeds of the stock, bank loan and note sales would be used to repay its outstanding senior notes and senior subordinated notes and part of the borrowings on its revolving credit facility. Riverwood did not at that time disclose the size of the new term loan or the note offering, although the registration statement disclosed that the outstanding notes which it plans to redeem have a total principal amount of $900 million, consisting of $400 million 10 7/8% senior subordinated notes due 2008 and $500 million 10 5/8% senior notes due 2007. Riverwood also had $250 million of 10¼% senior notes due 2006 outstanding, which were to be redeemed on May 23, using the proceeds of a new $250 million term B loan drawn on April 23, along with $12 million drawn on the existing revolving credit facility (the new money borrowed totaled more than $250 million because of fees, costs and expenses). Riverwood did not disclose underwriters for the prospective note offering or the banks for the new loan. Deutsche Bank Securities Inc. (call 212 469-7772) and J.P. Morgan Securities Inc. (call 800 831-2035) are the dealer managers for the tender offers and solicitation agents for the consent solicitations. MacKenzie Partners, Inc. (call 800 322-2885) is the information agent and State Street Bank and Trust Company is the depositary in connection with the offers and solicitations.

Sabine River gets consents from Port Arthur noteholders

SABINE RIVER HOLDING CORP. Said on Thursday (May 30) that its PORT ARTHUR FINANCE CORP. and PORT ARTHUR COKER CO. had received valid consents from the holders of 97% of the outstanding Port Arthur Finance 12½% senior notes due 2009 to proposed changes in the notes' financing and security documents, under the company's previously announced consent solicitation. That solicitation expired as scheduled on May 29 without extension. The closing of the consent and a related restructuring and the payment of the consent fee to qualifying holders is expected to occur on or about June 5. AS PREVIOUSLY ANNOUNCED, Sabine River is a 90 %- owned subsidiary of PREMCOR INC. (PCO) (Ba3/BB-), a petroleum products refiner based in Old Greenwich, Conn. which formerly sold high yield debt under the names of its CLARK REFINING GROUP INC. and CLARK USA INC. subsidiaries, (now known as THE PREMCOR REFINING GROUP INC. and PREMCOR USA INC., respectively). The company said on May 16 that its Port Arthur subsidiaries would solicit the noteholders' consents to the changes, which were aimed at facilitating a proposed restructuring that would, among other things, permit the prepayment of $221.4 million of Port Arthur Finance's existing bank debt and result in Sabine River Holding Corp. and its subsidiary companies becoming wholly owned direct or indirect subsidiaries of The Premcor Refining Group, which itself is a wholly owned indirect subsidiary of Premcor Inc. Sabine River said that If the amendments were to become effective, Premcor Refining Group would fully and unconditionally guarantee the payment obligations under the Port Arthur Finance 12½% notes. The consent solicitation was set to expire at 5 p.m. ET on May 29, subject to possible extension (although it was not extended). The consent solicitation was conditioned upon the receipt of valid consents from at the holders of at least a majority of the aggregate principal amount of the outstanding notes, and on the satisfaction or waiver of certain other conditions, including the rating agencies reaffirming their credit ratings on the 12½% notes after giving effect to the proposed amendments and restructuring. Sabine River said that In order to be eligible for the consent fee of $20 per $1,000 principal amount of the notes, holders had to deliver their consents on or before the consent solicitation expiration deadline. It said consents could be revoked any time prior to the expiration of the solicitation, but not after that. The company said that the Premcor Refining Group Inc. guarantee has not been, and will not be, registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Jordan buys $110 million 11¾% '09 debentures

JORDAN INDUSTRIES INC. (Caa3/B-) said in a filing with the Securities and Exchange Commission on Thursday (May 30) that it had purchased $110 million principal amount of its $214,036,493 of 11¾% Series A senior subordinated discount debentures due 2009 (Ca/B-). The purchase took place on May 29 at an average price of $250 per $1,000 bond, or $27.5 million total. Jordan - a Deerfield, Ill.-based diversified industrial company with interests in areas such as specialty plastics, motors and gears, flavor and fragrances, Internet services, automotive aftermarket, healthcare, and specialty printing and labeling - said the debentures had been purchased from an institutional investor. After the purchase, $104,036,493 of the debentures will be outstanding. The company will report an extraordinary gain after taxes from the transaction of $82,711,167. Jordan said it does not anticipate making any further debenture purchases at this time; however, it noted that some of the company's directors, officers and/or shareholders might purchase some of the Series A debentures "at prices commensurate to or above that of the Company."

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