Nebraska Book, parent fail to get consents from 8¾% and 10¾% debt holders

New York, Oct. 23 - Nebraska Book Co., Inc. (B3/B-) and its corporate parent, NBC Acquisition Corp. (Caa1/B-), said that their previously announced solicitation of investor consents to amending certain covenants and other provisions of the indenture for Nebraska Book's 8¾% senior subordinated notes due 2008 and NBC Acquisition's 10¾% senior discount debentures due 2009 expired as scheduled at 5 p.m. ET on Oct. 22, without further extension.

The companies said that as of that deadline, they did not receive did not receive the requisite consents of holders of the notes and the debentures and thus will not amend the provisions of the indentures as previously outlined.

As previously announced, Nebraska Book Co., an Omaha, Neb.-based college textbook wholesaler and college bookstore operator, and corporate parent NBC Acquisition said on Oct. 7 that Nebraska Book was soliciting noteholder consents to amend certain covenants and other provisions of the indenture for its 8¾% notes, while NBC Acquisition was soliciting consents to amend certain covenants and other provisions of the indenture for its 10¾% notes.

The companies initially announced that the twin consent solicitations would remain open until 5 p.m. ET on Oct. 17, although this was subsequently extended, most recently to Oct. 22.

They said that adoption of the proposed amendments would have required the consent of the holders of at least a majority in principal amount of the notes or the debentures, as applicable.

Had they received the requisite consents, Nebraska Book and NBC Acquisition had planned to each pay a consent fee of $25 per $1,000 principal amount of securities to noteholders or debenture holders, as applicable, who had delivered valid and unrevoked consents by the expiration deadline.

They said that the obligations of each company to pay consent fees would be subject to the satisfaction, on or before Jan. 2, 2004, of certain conditions described in the official consent solicitation statement.

As described in the official consent solicitation statements, Nebraska Book and NBC Acquisition proposed to undertake a series of transactions, including 1) the consent solicitations for each company; 2) entry into a new secured credit facility that is expected to consist of a $50 million revolving credit facility and a $110 million term loan facility; 3) the use of cash on hand and borrowings under the new senior credit facility by Nebraska Book to refinance all indebtedness under its existing credit facility, to pay a dividend to NBC Acquisition of $91 million and to pay fees and expenses related to the transactions; and 4) the use by NBC Acquisition of the proceeds from the $91 million dividend to purchase shares of its common stock and stock options totaling a maximum of $86 million and to pay fees and expenses related to the transactions.

The companies said that the proposed indenture amendments would have a) revised the Limitation on the Restricted Payments covenant in the indenture governing the 8¾% notes, to permit Nebraska Book to make the aforementioned dividend to NBC Acquisition, and in the indenture governing the 10¾% debentures, to permit NBC Acquisition to purchase shares of its common stock and stock options, as described above; and b) would have revised certain defined terms in each of the indentures to permit or facilitate the transactions.

Citigroup (call 212 723-6106 or toll free at 800 558-3745) and JPMorgan (212 270-9153) were the solicitation agents for the consent solicitations. Global Bondholder Services Corp. was the information agent and tabulation agent for each of the consent solicitations (212 430-3774 or 866-873-7700).

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