Wickes completes exchange for 11 5/8% '03 notes

Wickes Inc. (Ca) said on Wednesday (Feb. 26) that it had completed its previously announced offer to exchange new debt for its outstanding 11 5/8% senior subordinated notes due 2003. That offer expired as scheduled at 5 p.m. ET on Tuesday (Feb. 25), with no further extension.

Wickes said that as of that expiration deadline, it had received valid tenders from the holders of $42.833 million of the existing notes, or approximately 67% of the outstanding amount, and that it had accepted all tendered notes for exchange for an equal principal amount of the new notes.

Concurrent with the closing of the exchange offer, the indenture governing the outstanding 11 5/8% notes was amended to remove or modify many of its restrictive covenants.

Wickes also announced that it had completed the refinancing of its senior credit facility with the proceeds of a new $125 million senior credit facility via a lending group led by led by Merrill Lynch Capital, which acted as the agent on behalf of a group of lenders. The new credit facility, which matures in 2007, is comprised of a $100 million revolving credit facility and a $25 million term loan.

D. F. King & Co., Inc. (call 800 859-8508 toll-free in the U.S.) was s the information agent for the exchange offer. The exchange agent was HSBC Bank USA (call 718 488-4475 attn: Paulette Shaw). Investors with further questions about the exchange transaction can call Wickes at 847 367-3414.

AS PREVIOUSLY ANNOUNCED, Wickes, a Vernon Hills, Ill.-based distributor of building materials and manufacturer of value-added building components, said on Dec. 20, 2002, that it had begun an offer to exchange new debt for its $63.956 million of outstanding 11 5/8% notes. Wickes said it would exchange an equal principal amount of its new senior secured notes due 2005 for any and all of the existing bonds.

The company said the new notes would initially pay interest at the same 11 5/8% rate as the existing notes from the date of issuance through Dec.15 of this year and at 18% thereafter. Interest at 11 5/8% would be paid currently in cash, while the balance would paid currently in cash to the extent the company has excess cash flow (as defined in the indenture governing the new senior secured notes), and would accrue to the extent not paid in cash.

It said the new notes would be secured by liens on the company's owned real estate and equipment, subject to the priority of the liens to the company's senior lenders, and would rank equally with the company's revolving credit agreement and senior to the existing subordinated notes.

Wickes also said it was soliciting consents from the holders of the existing subordinated notes to amendments to the notes' indenture eliminating most of the covenants contained therein.

It said that the three largest noteholders, representing approximately 40% of the outstanding subordinated notes, had agreed to exchange their notes under the terms of the exchange offer and to consent to such amendments. In order for such amendments to become effective, consents would have to be obtained from the holders of a majority of the outstanding subordinated notes.

The company initially said the exchange offer would expire at 5 p.m. ET on Jan. 22 (this was subsequently extended). It was not subject to any minimum amount of subordinated notes being exchanged. But Wickes said the exchange offer would be subject to the company obtaining the consent of its senior lenders or the refinancing of its senior debt with a new senior lender who consents to the exchange offer. Wickes warned that it could give no assurances that such consent or refinancing would be obtained, although it said that talks had begun with a potential new senior lender to refinance the senior debt.

Wickes additionally said that its exchange offer contemplates a $4.98 million mandatory redemption in cash scheduled for the new senior secured notes' first interest payment date on March 17, as a result of the previously announced Lanoga sale proceeds (on Oct. 30, Wickes said it had agreed to sell substantially all of the assets of its operations in Wisconsin and northern Michigan to Lanoga Corp., through its United Building Centers division. Completion of the sale, at a price of 55.253 million, plus an additional net amount of approximately $20 million for the value of the inventory and accounts receivable of the business operations sold, was announced on Dec. 16).

The mandatory redemption proceeds to be applied to the new senior secured notes based upon the 85% applicable optional redemption price, would be be shared pro-rata based on the aggregate principal amount of existing senior subordinated notes exchanged.

Wickes subsequently extended the exchange offer twice, most recently to 5 p.m. ET on Feb. 25, subject to possible further extension. Both times, it said it had received tenders from the holders of approximately 67% of the outstanding aggregate principal amount of the 11 5/8% notes, including tenders from the three largest holders, who collectively represent about 40% of the notes and who had previously agreed to exchange their notes under the terms of the exchange offer.

Sovereign Bancorp tenders for 8 5/8% and 10¼% '04 notes

Sovereign Bancorp, Inc. said on Wednesday (Feb. 26) that it would begin a tender offer to purchase any and all of its $175 million of outstanding 8 5/8% senior notes due in March, 2004 and its $200 million of outstanding 10¼% senior notes due in May, 2004.

It said that the tender offer would begin at 9 a.m. ET on Wednesday and would terminate at 5 p.m. ET on March 4, subject to possible extension.

Sovereign, a Philadelphia-based bank holding company, said that the tender price is $1,062.50 per $1,000 principal amount of 8 5/8% notes tendered and $1,091.25 per $1,000 principal amount 10 ¼% notes tendered.

Funding for purchasing notes tendered under the offer will be provided by a $120 million dividend made from the capital of the company's Sovereign Bank unit in the first quarter, and by an advance under Sovereign's credit facility with the Bank of Scotland.

Salomon Smith Barney (call 212-723-6106 or toll-free at 800-558-3745) and Lehman Brothers (call 212-528-7581 or toll-free at 800-438-3242) have been appointed dealer managers for the tender offer.

Nextel Partners retired additional debt in fourth quarter

Nextel Partners Inc. said on Wednesday (Feb. 26) that it had retired $37 million in principal amount of its outstanding debt in the fourth quarter of 2002.

Nextel Partners, a Kirkland, Wash.-based provider of Nextel Communications Inc.'s branded wireless service to medium and small size markets, said in its fourth-quarter earnings release that to date, it has retired a total of $45 million in principal amount of debt in exchange for approximately 5 million newly issued shares of Class A common stock.

The company said that it may enter into similar transactions, which may be material "from time to time" as it deems appropriate.

Knoll to redeem 10 7/8% '06 notes

Knoll, Inc. Said on Tuesday (Feb. 25) that it will redeem the total principal amount of its 10 7/8% senior subordinated notes due 2006 on March 28, at a redemption price of 101.812% of par value (i.e. $1,018.12 per $1,000 principal amount) , plus accrued interest.

Knoll, an East Greenville, Pa.-based office furnishings manufacturer, said it plans to fund the redemption with borrowings under its senior revolving credit facility.

American Restaurant Group redeems 11½% notes

American Restaurant Group Inc. said on Tuesday (Feb. 25) that it had fully redeemed in cash its outstanding 11½% Series B senior secured notes on Feb. 18.

American Restaurant Group, a Los Altos, Calif.-based restaurant chain operator, said that it had $3.41 million in outstanding 11½% notes.

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