SOLA completes tender offer for 11% notes

New York, Dec. 11 - SOLA International Inc. (Ba3/BB-) said it had completed its previously announced tender offer and related consent solicitation for its 11% senior notes due 2008. The offer expired as scheduled at 5 p.m. ET on Dec. 8 without extension, by which time €185 million out of the €205 million outstanding principal amount had been tendered. The total consideration paid in connection with the tender was €214.5 million, or about $252 million.

SOLA also said that it had successfully completed a new senior secured credit facility, consisting of a $175 million six-year term loan priced at Libor plus 250 basis points and a new $50 million five-year revolving credit facility, which was undrawn at closing, priced at Libor plus 300 basis points. The company's existing $90 million revolving credit facility was terminated in connection with these transactions. Proceeds from the new term loan, as well as a portion of the net proceeds of approximately $113 million from the company's recently completed common stock offering (an increase from the originally estimated $98.3 million), were used to fund the tender offer for the notes, with the remainder slated for general corporate purposes.

As previously announced, SOLA, a San Diego-based maker of eyeglass lenses, said on Nov. 7 that it had begun an offer to purchase for cash all €205 million principal amount of its 11% notes and was also soliciting noteholder consents to proposed indenture changes.

It set 5 p.m. GMT on Nov. 20 as the consent deadline and 9 a.m. GMT on Dec. 8 as the expiration for the tender offer, subject to possible extension. Sola announced on Nov. 26 that it had received the requisite amount of consents to the proposed indenture changes.

SOLA said that noteholders tendering their notes and delivering valid consents to the proposed amendments on or before the consent deadline (and not subsequently withdrawing them) would receive both the tender offer consideration and the consent payment. Holders tendering after the consent deadline would only receive the tender offer consideration, but not the consent payment. It said that tendered notes could be withdrawn and consents revoked at any time on or prior to the tender offer expiration date.

SOLA initially did not give any information as to the likely tender consideration or consent payment but on Dec. 3 announced that it had set the tender offer consideration at €1,113.71 per €1,000 principal amount of notes and set the total consideration to be paid for those notes tendered by the now-expired Nov. 20 consent deadline at €1,133.71 per €1,000 principal amount, including a consent payment of €20 per €1,000. It said that holders tendering their notes after the consent deadline would receive the tender offer consideration, but not the consent payment.

The company said that the total consideration to be paid for validly tendered notes was based on: 1) 35% at €1,110 per €1,000 principal amount of notes; plus 2) 65% at a price based on a yield to the earliest redemption date of the notes based on a fixed spread of 75 basis points over the semi-annualized yield to maturity of the reference security (the German BKO 2.50% note due March 18, 2005), as calculated by UBS Investment Bank at 2 p.m. GMT on Dec. 2. Accordingly, the yield used to determine the total consideration to be paid for validly tendered notes was 3.340%. Sola said the total consideration figure assumed a payment date of Dec. 11.

UBS Limited and UBS Securities LLC were dealer managers and solicitation agents for the offer (call Liability Management Group at +44 20 7567-7480 or 203 719-4210). D.F. King & Co. was the information agent (call 212 269-5550 or +44 20 7920-9700).

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