LNR completes tender for 10½% notes

New York, Nov. 14 - LNR Property Corp. (Ba3/B+) said it had completed its previously announced tender for its 10½% senior subordinated notes due 2009, which expired as scheduled at 5 p.m. ET on Nov. 13 without extension.

As of that deadline, $74.7 million principal amount of the notes had been tendered. LNR accepted all notes that were properly tendered and not withdrawn. The total cost to LNR of purchasing the tendered notes will be $79.8 million plus accrued interest through Nov. 13.

About $43.7 million principal amount of the notes remained outstanding as of the expiration date of the tender offer.

LNR will record a charge of $19 million to its earnings for the fiscal quarter ending Nov. 30, primarily related to the premium paid for the notes tendered in the tender offer and for earlier purchases of $131.6 million principal amount of the notes in the market.

As previously announced, LNR, a Miami Beach-based real estate investment and finance company, announced plans on Oct. 14 to sell at least $275 million of new 10-year senior subordinated notes in a Rule 144A offering and then use at least a portion of the anticipated new-deal proceeds to fund a tender offer for all of its outstanding 10½% notes.

The company further said that the 10½% notes will first become redeemable on Jan. 15, and that it expects to redeem on that day all of the 10½% notes that may remain outstanding after the tender offer; however, LNR said it is seeking to acquire as many as possible of the 10½% notes before then, in order to minimize interest costs. LNR said it would use a portion of the new-deal proceeds to pay the redemption price of the 10½% notes still outstanding on Jan. 15.

On Oct. 15, LNR announced that it had begun its tender offer for all of the outstanding notes, offering a purchase price equal to 106.892% of their principal amount plus accrued interest up to, but not including, the day LNR would pay for the notes it purchases. The company said it expected that to be Nov. 14.

LNR set 5 p.m. ET on Nov. 13 as the tender deadline, subject to possible extension. It said that tendered notes could be withdrawn at any time until 5 p.m. ET on the day the tender offer expires.

LNR separately announced on Oct. 15 that it had sold an upsized $300 million offering of new 7 ¼% senior subordinated notes due 2013, with proceeds expected to fund the tender offer and redemption of the 10 ½% notes. On Oct. 23, the company agreed to sell another $50 million of the new notes.

Deutsche Bank Securities was the dealer manager for the offer. U.S. Bank Trust NA was the depositary. MacKenzie Partners, Inc. was the information agent (800 322-2885).

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