IOS Capital sets consideration in tender for 9¾% '04 notes

New York, June 10, 2003 - IOS Capital, LLC (Ba1/BBB-) said it has set the consideration it will offer to the holders of its 9¾% notes due 2004, under its previously announced tender offer for those notes.

IOS said that the total consideration to be paid per $1,000 principal amount of notes validly tendered and not subsequently withdrawn will be $1,088.69, plus accrued and unpaid interest up to but not including the applicable payment date. That total includes $30 per $1,000 principal amount early tender payment, which will be paid only holders who tendered their notes by the now-expired early tender deadline of 5.00 p.m. ET on June 9. All other holders will receive $1,058.69 per $1,000 principal amount, plus accrued interest.

The company said that as of the early tender deadline, $205.609 million in aggregate principal amount of the notes, or 85.5% of outstanding amount, had been tendered and not withdrawn.

Separately, high yield syndicate sources said on June 10 that IOS had sold $350 million of new 7¼% senior unsecured notes due 2008, with a portion of the offer's proceeds expected to be used to fund the tender offer for the 9¾% notes.

As previously announced, IKON Office Solutions, a Valley Forge, Pa.-based provider of office equipment and business services, said on June 3 that its IOS Capital U.S. leasing subsidiary was tendering for any and all of IOS Capital's outstanding $240.5 million of 9¾% notes (effective June 15, the coupon interest rate rises to 10¾%).

IKON set 5.00 p.m. ET on June 9 as the early tender deadline and said the offer would expire at midnight ET on June 30, with both deadlines subject to possible extension.

The company said that total consideration for tendered notes would be determined by a formula based on a 75-basis point fixed spread over the yield on the reference security (the 2 7/8% U.S. Treasury Note due June 30, 2004) as of 2.00 p.m. ET on the price determination date (the consideration was set at 2.00 p.m. ET on June 10).

The company said that total consideration would include the $30 per $1,000 principal amount early tender premium, with holders validly tendering their notes after the early tender deadline eligible to receive only the total consideration minus the early tender premium, and all noteholders to additionally receive accrued and unpaid interest up to, but not including, the applicable settlement date.

IKON said that it would finance the tender offer with the net proceeds from its public offering of a new series of notes and cash on hand (IKON separately but concurrently announced a series of financing initiatives, including the tender offer and the notes offering and said that the tender offer and simultaneous notes offering would allow the company to satisfy certain early maturity provisions in its existing $300 million credit facility).

IKON further said that the successful completion of the tender offer, in addition to actions to repurchase non-finance subsidiary debt, is expected to negatively impact earnings per diluted share by between nine cents and 11 cents, which is expected to be recognized as a loss on the early extinguishment of debt in the third fiscal quarter ending June 30.

The company said that completion of the tender offer would be conditioned upon, among other things, the consummation by IKON/IOS of the offering of the new notes on terms and conditions satisfactory to the company at or before the tender offer expiration, and that the net proceeds of such an offering, together with cash on hand, would be sufficient to purchase all outstanding notes.

Lehman Brothers Inc. will to serve as Dealer Manager for the tender offer (contact Emily Shanks toll-free at 800-438-3242 or collect at 212- 528-7581. D.F. King & Co., Inc. will serve as the Information Agent (call toll-free at 800- 697-6975 or collect at 212- 269-5550.

Domino's says consent condition in 10 3/8% '09 notes tender is satisfied, fixes price

New York, June 10 - Domino's, Inc. (B3) announced that it had received consents to proposed indenture changes from noteholders representing more than a majority in principal amount of its outstanding 10 3/8% senior subordinated notes due 2009, as part of its previously announced tender offer and consent solicitation for those notes. It also fixed the price in the tender offer..

The company said that the consent condition related to the pending tender offer had been satisfied; following the receipt of the requisite consents, Domino's, certain of its subsidiaries and The Bank of New York, as trustee, executed the second supplemental indenture to the notes' indenture, incorporating the desired changes.

These amendments will become operative on the date that Domino's accepts for purchase any notes that are validly tendered in the tender offer.

As of 5.00 p.m., ET on June 10 - the previously announced consent deadline - 97% of the outstanding principal amount of the notes have been tendered, with the tender offer slated to continue to its scheduled June 24 expiration date.

Domino's also said it will pay $1,098.95 per $1,000 principal amount for notes tendered by the consent deadline or $1,078.95 for notes tendered after.

As previously announced, the price was determined based on a spread of 75 basis points over the 3% U.S. Treasury note due Jan. 31, 2004. The calculation was carried out on June 10, the tenth business day before expiration.

Domino's, an Ann Arbor, Mich.-based nationwide pizza chain, said on May 29 that it had begun a tender offer for all of its outstanding 10 3/8% notes, and was soliciting noteholder consents to the proposed indenture changes. The company issued $275 million of the notes in December, 1998, of which an undetermined amount is currently outstanding.

Domino's set a consent payment deadline of 5.00 p.m. ET on June 10, now expired, and said the offer itself would expire at 5.00 p.m. ET on June 24, with both deadlines subject to possible extension.

The company said that the total consideration to be paid for the notes would include a consent fee of $20 per $1,000 principal amount of notes tendered, payable to those noteholders tendering their notes by the consent payment deadline. Holders tendering after that deadline will not be eligible to receive the consent payment. All tendering noteholders will additionally receive accrued and unpaid interest up to, but not including, the payment date for notes accepted for purchase.

Domino's said that the tender offer would be conditioned on several factors, including the now-fulfilled requirements that the company's receive valid and unrevoked consents from noteholders representing a majority in principal amount of the outstanding notes, and that the notes' trustee execute a supplemental indenture incorporating the proposed indenture changes.

Other conditions include the completion of related transactions.

The dealer manager for the tender offer is J.P. Morgan Securities Inc. (call Spencer Alstodt at 212- 270-1100). MacKenzie Partners, Inc. (call 212- 929-5500 or toll-free at 800-322-2885) is the information agent.

Houston Exploration closes on bond deal; proceeds to redeem 8 5/8% '08 notes

New York, June 10 - The Houston Exploration Co. (B2/B+) said that it had closed on its sale of $175 million 7% senior subordinated notes due 2013, which took place on June 5.

The Houston-based independent energy exploration and production operator plans to use a portion of the approximately $170 million of net proceeds redeem all its outstanding $100 million principal amount of 8 5/8% senior subordinated notes due 2008 at a price of 104.313% of par plus interest accrued up to the redemption date.

Remaining net proceeds from the offering will be used to reduce borrowings on the company's revolving bank credit facility.

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