Dynegy lenders OK restructure moves, including note tender offers

New York, July 28 - Dynegy Inc. (B3/B) said that it had received more than 99% approval from its lenders to consummate a series of previously announced long-term restructuring and refinancing transactions, including pending tender offers for all of three series of its outstanding senior notes (the 8 1/8% notes due 2005, the 6¾% notes due 2005 and the 7.450% notes due 2006).

The company said that only 67% approval from its lenders had been required.

High yield syndicate sources meanwhile said that the company was heard to be planning to sell $1.325 billion of new 10-year and 12-year notes - up slightly from the previously mentioned figure of $1.2 billion, apparently due to the accompanying cut in size of a previously proposed concurrent convertibles offering, from $300 million to $175 million. A portion of the bond sale proceeds are slated to be used to fund the tender offers for the existing notes. The bond sale was heard taking place possibly as early as Friday (Aug. 2).

Success in obtaining such financing is a condition of the credit agreement amendment announced Monday as well as of the bond tender offers themselves. Consent of the lenders to the changes in the credit facility that would facilitate the restructuring transactions also was a condition of the bond tender offers.

As previously announced, Dynegy, a Houston-based energy producer, said on July 15 that it would tender for its $300 million of 8 1/8% notes, its $150 million of 6¾% notes and its $200 million of 7.450% notes, and that it would also seek noteholder consents to proposed indenture amendments that would eliminate several of the restrictive covenants and certain related provisions currently contained in the notes' respective indentures.

Dynegy set a now-expired consent deadline of 5 p.m. ET on July 24 and said the tender offer would expire at midnight ET on Aug. 8, with both deadlines subject to possible extension.

The company is offering tender offer consideration of $1,000 per $1,000 principal amount of the 8 1/8% notes tendered and accepted for purchase and $980 per $1,000 principal amount of 6¾% and 7.45% notes. All tendering holders will also receive accrued and unpaid interest to but excluding the date of purchase.

It added that holders validly tendering their notes by the consent deadline, and thus consenting to the proposed indenture changes, would be eligible to receive a $20 per $1,000 principal amount consent payment.

The company said it expected to make payment of the tender offer consideration for validly tendered notes and the consent fee for valid consents received prior to the consent payment deadline promptly following the tender offer expiration.

Dynegy said that completion of the tender offer and consent solicitation would be subject to the completion of proposed capital markets transactions the company announced concurrently with the tender offer, and the effectiveness of a proposed amendment to its credit facility, among other factors.

Dynegy announced on July 15 that it planned to issue approximately $1.2 billion of second priority senior secured notes and approximately $300 million of convertible debentures in private placements, primarily to fund the tender offer and significantly reduce bank debt. In addition to the proceeds of the senior secured note and convertible offerings, existing cash on hand will also be used for this purpose. The company further said that it intends to restructure the existing $1.5 billion of its Series B mandatorily convertible redeemable preferred stock held by a subsidiary of ChevronTexaco Corp., which will, exchange the preferred stock for $225 million in cash, $225 million of newly issued Dynegy junior unsecured subordinated notes due 2016 and $400 million of newly issued Dynegy Series C convertible preferred stock). Dynegy also said it would seek lender approval for the credit facility amendment, which would, among other things, permit the proposed capital markets transactions, the tender offer and consent solicitation and the Series B preferred stock restructuring.

Dynegy said on July 24 that it that it had obtained consents from approximately 90% of its noteholders by the consent deadline at 5 p.m. ET that day, consisting of tenders and consents representing $279.774 million or 93%, of its $300 million 8 1/8% notes; $133.543 million or 89% of its $150 million 6¾% notes and $169.159 million or 85% of its 7.45% notes.

Dynegy said it would execute and deliver supplemental indentures for each series of notes with the amendments, which would only become operative when validly tendered notes are purchased under the tender offer.

MacKenzie Partners, Inc. is the information agent for the tender offer (call toll-free at 800-322-2885).

Bio-Rad to fund tender for 11 5/8% notes with new-deal proceeds

New York, July 28- Bio-Rad Laboratories, Inc. (BB- ) announced plans to sell $200 million of new senior subordinated notes in a Rule 144A offering, with a portion of the expected deal proceeds to be used to fund the previously announced purchase of its outstanding 11 5/8% senior subordinated notes due 2007.

As previously announced, Bio-Rad, a Hercules, Calif. manufacturer and distributor of life-science research and clinical diagnostic products, said on July 17 that said it had begun a cash tender offer for all $88.715 million of its outstanding 11 5/8% notes, and had also begun soliciting consents to proposed amendments to the notes' indenture that would eliminate substantially all of the restrictive covenants and certain related terms.

The company set a consent deadline of 5 p.m. ET on July 30 and an expiration deadline of 12:01 a.m. ET on Aug. 14, both subject to possible extension.

It said that holders tendering their notes and delivering consents by the consent deadline would receive total consideration of 110.625% of the principal amount of notes validly tendered and accepted for payment, which would include a consent payment of 1.5% of the principal amount.

Holders tendering after the consent deadline but before the offer expiration would receive consideration of 109.125% of the principal amount of tendered notes.

Goldman, Sachs & Co. (800 828-3182) is dealer manager and solicitation agent for the offer, and the information agent is Bondholder Communications Group (888 385-2663).

CSK Auto completes redemption of 11% notes

New York, July 28 - CSK Auto Corp. said that it had completed the redemption of the remaining $9.547 million in aggregate principal amount of subsidiary CSK Auto Inc.'s 11% senior subordinated notes due 2006.

The company used proceeds from its new credit agreement (completed June 20) to redeem the notes, including accrued and unpaid interest and the applicable redemption premium.

CSK, a specialty retailer in the automotive aftermarket, originally issued the notes in 1996. On Aug. 1, 2002, CSK announced that it had completed the redemption of $71.03 million of the then-outstanding $81.25 million outstanding principal amount of the notes, leaving $9.547 million still outstanding. CSK at that time used the proceeds of an equity offering to fund the redemption.

American Tower to use 50% of $175 million convertible offering, part of stock sale to buy back debt

New York, July 28 - American Tower Corp. said it will use 50% of the proceeds from a planned $175 million offering of convertible notes securities and some of the proceeds from a $114.4 million offering of stock to repurchase outstanding debt.

The Boston company announced Monday that it plans to sell $175 million of convertible notes due 2010 and 12.4 million shares of common stock for estimated net proceeds of $114.4 million.

The convertible offering has a $35 million greenshoe.

The half of proceeds from the convertible sale not used to buy back debt securities will be used to repay borrowings on its credit facilities.

In addition proceeds from the stock offering will be used to repurchase outstanding debt securities or to make equity contributions to the borrower subsidiaries under its credit facilities, which will be able to use the proceeds for general corporate purposes.

Alderwoods to redeem 11% notes, some of Rose Hills' 9½% notes with new credit facility

New York, July 28 - Alderwoods Group, Inc. said it plans to redeem its $195 million of 11% senior secured notes due 2007 and $80 million of Rose Hill's 9.5% senior subordinated notes due n 2004 with borrowings under a new senior secured credit facility. Rose Hills is a wholly owned subsidiary of Alderwoods.

The Cincinnati funeral home and cemetery operator said the new credit facility will be made up of a $50 million revolving credit facility - which is expected to be undrawn except for letters of credit - and a $275 million term loan B.

"This announcement is consistent with our ongoing efforts regarding balance sheet management," stated Paul Houston, president and chief executive officer of Alderwoods. "With our first year of emergence [from bankruptcy] behind us and interest rates at an historic low, it is an appropriate time to refinance certain existing indebtedness."

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