Penn National fails to get Shreveport noteholders consents; Hollywood Casino calls notes

Penn National Gaming, Inc. (B1) said on Monday (March 3) that it failed to obtain the consent of holders of Hollywood Casino Shreveport and Shreveport Capital Corp.'s 13% notes due 2006 to proposed waivers it was seeking in connection with Penn National's acquisition of Hollywood Casino Corp. (B3), the ultimate corporate parent of the two note-issuing companies.

The consent solicitation expired as scheduled without extension at 5 p.m. ET on Friday (Feb. 28) without Penn National having obtained the consent of holders of a majority of the notes to the waiver, which would have waived the requirement that the notes, which are non-recourse to Hollywood Casino, be purchased upon change of control of the company. The Hollywood Casino acquisition was not dependent upon Penn National obtaining the noteholder waivers.

Penn National - which separately announced on Monday that it had closed on an $800 million senior secured credit facility to fund its acquisition of Hollywood Casino and to provide additional working capital, and that it had completed the acquisition of Hollywood Casino - also said that it would not proceed with commitments for an additional $200 million in financings, which had been made available only to finance a possible change-of-control offer for the 13% notes, which will remain outstanding, since Penn National had already said that it did not plan to make such an offer.

Penn National further noted that Hollywood Casino Shreveport and Shreveport Capital Corp., which operate a casino property in Shreveport, La., recently reported that they have limited liquidity; the Independent Auditors' Report included with the recently filed 10-K report for the Shreveport companies expressed substantial doubt about their ability to continue as a going concern.

Penn National said that in connection with the acquisition, it expects to reduce the carrying value of the Shreveport asset based on its estimate of fair market value at the time of the merger. It said that among the factors that will be considered in this analysis will be the property's performance, single-property asset sale multiples on property cash flow, anticipated future cash flows, overall conditions in the Shreveport market and independent appraisal.

Separately, Hollywood Casino - which also operates more profitable casino properties in Aurora, Ill. and Tunica, Miss. - called for redemption all of its outstanding long-term debt obligations (apart from the non-recourse 13% notes), comprised of $310 million of 11¼% senior secured notes due 2007 and $50 million of floating-rate senior secured notes due 2006, at 107% and 101% of their par value ($1,070 per $1,000 principal amount and $1,010 per $1,000 principal amount), respectively.

D.F. King & Co., Inc. served as the information agent and tabulation agent in connection with the solicitation of consents.

AS PREVIOUSLY ANNOUNCED: Penn National, a Wyomissing, Pa.-based casino operator, said on Feb. 24 that one of its wholly owned subsidiaries was soliciting consents to proposed waivers with respect to the notes from the holders of record (as of Feb. 21) of the 13% senior secured notes due 2006 and the 13% first mortgage notes due 2006 issued by Hollywood Casino Shreveport and Shreveport Capital Corp (the company issued a total of $189 million of the notes in two offerings, in 1999 and 2001; it did not say what amount of the notes is currently outstanding).

Penn National said it was seeking the waivers in connection with its proposed merger transaction with Dallas-based gaming operator Hollywood Casino Corp. (which was subsequently completed), and said that the principal purpose of the proposed waivers would be to eliminate the risk of a default under the indentures governing the notes that could occur as a result of the merger.

The company explained that the proposed waivers would have provided Penn National Gaming with an opportunity to evaluate the Shreveport Casino with a view towards rationalizing its operations and capital structure without the distractions and disruption associated with a default under the indentures. A default would occur in the event that the issuers of the notes or any other party fails to make or consummate an offer to purchase the notes at 101% of their principal amount following the merger, as is required under the indentures and the notes due to the change of control resulting from the merger.

Penn National said that it does not intend to make a change of control offer to repurchase the notes, nor will it permit any of its subsidiaries to do so or provide financing or credit support to enable any of them, or Hollywood Casino, to do so.

It said that no consideration would be paid to any noteholder in connection with the consent solicitation.

The company said the consent solicitation would expire at 5 p.m. ET on Feb. 28, subject to possible extension. It said that the proposed waivers would be approved and will become effective at the time - on or prior to the expiration deadline - that Penn National received consents from the holders of at least a majority of the senior secured notes and a majority of the first mortgage notes.

The proposed waiver for the senior secured notes and the proposed waiver for the first mortgage notes were conditioned upon each other, and, accordingly, the requisite consents would have had to have been received for each series of notes for each of the proposed waivers to become effective.

The company further said that completion of the Penn National-Hollywood Casino merger would be subject to certain conditions, including certain regulatory approvals, but that approval of the proposed waivers was not a condition to consummation of the merger.

Comdisco completes latest optional partial redemption of 11% '05 notes

Comdisco Holding Company, Inc. said on Monday (March 3) that it had completed its previously announced optional partial redemption of $75 million principal amount of its 11% subordinated secured notes due 2005, bringing the outstanding principal amount of the notes after this redemption down to $160 million from $235 million previously.

The redemption was the latest in a string of such transactions which began last fall. Comdisco did not announce any further redemptions at this time.

The notes were redeemed on March 3 par value plus accrued and unpaid interest up to the redemption date. Wells Fargo Bank was the paying agent for this redemption.

AS PREVIOUSLY ANNOUNCED, Rosemont, Ill.-based Comdisco, which formerly provided equipment leasing and technology services to business customers, emerged following its Chapter 11 bankruptcy reorganization as a holding company whose purpose is to sell, collect or otherwise reduce to money the remaining assets of the corporation.

It said on Oct. 9 that it would redeem the entire $400 million outstanding principal amount of its variable-rate senior secured notes due 2004 on or about Oct. 21, at par plus accrued and unpaid interest from Aug. 12 to the redemption date. Comdisco said that Wells Fargo Bank would serve as the paying agent for the planned note redemption. Comdisco said on Oct. 23, that this redemption had taken place as scheduled on Oct. 21.

Comdisco also said that following the redemption of those notes, it would make cash interest payments on the 11% notes. It explained that terms of the 11% subordinated notes provided for the interest to be paid-in-kind through the issuance of additional 11% subordinated notes while the senior notes were outstanding. It said the initial interest payment date for the subordinated notes would be Dec. 31 and the cash interest payment would be made on that date to registered holders of record (as of the close of business on Dec. 15) of the 11% notes.

On Oct. 29, Comdisco said that it would make a partial redemption of $65 million of the outstanding principal amount of the 11% notes (out of the $650 million which were outstanding at that time), under its mandatory redemption obligations. Comdisco said the notes would be redeemed at par plus accrued and unpaid interest from Aug. 12 to the redemption date. It anticipated that the partial redemption of the notes would occur on Nov. 14, and that Wells Fargo Bank would serve as the paying agent for that redemption. On Nov. 15, Comdisco said that it had redeemed the $65 million of 11% notes on Nov. 14, as previously announced, bringing the outstanding amount down to $585 million.

Comdisco said on Dec. 9 that it would make a redemption of another $200 million of the 11% notes (out of the then-current total outstanding amount of $585 million). It said that the notes would be redeemed at par plus accrued and unpaid interest from Aug. 12 to the redemption date. The company anticipated that the partial redemption of the notes would occur on Dec. 23, with Wells Fargo Bank serving as the paying agent for that redemption. On Dec. 23, Comdisco said that it had completed the transaction, which brought the remaining total outstanding amount down to $385 million.

Comdisco also announced at that time that it would make optional further partial redemption of $100 million of the 11% notes, out of the then-currently outstanding $385 million. It said it would redeem the notes at par plus accrued and unpaid interest, up to the redemption date of Jan. 9. Comdisco said on Jan. 9 that it had completed the transaction, which brought the amount outstanding following the transaction down to $285 million. Wells Fargo Bank served as the paying agent for this redemption.

On Jan. 24, Comdisco said that it was planning to make a further optional partial redemption of $50 million of the 11% notes (out of the total then outstanding amount of $285 million). It said the notes would be redeemed on Feb. 10 at par plus accrued and unpaid interest up to the redemption date. Comdisco said on Feb. 10 that it had completed the transaction, which brought the outstanding amount down to $235 million.

On Feb. 14, Comdisco said that it would make an optional partial redemption of $75 million principal amount of the 11% notes on March 3 at par plus accrued interest via paying Agent Wells Fargo Bank, which would bring the outstanding principal amount of the notes after the redemption down to $160 million from $235 million.

Azteca Holdings to offer new debt for 10 ½% '03 notes

Azteca Holdings, S.A. de C.V. (B2) said on Monday (March 3) that it would offer to exchange new 10¾% senior secured amortizing notes due 2008 for its outstanding 10½% senior secured notes, which are scheduled to mature on July 15.

Azteca Holdings - the Mexico City-based controlling shareholder of TV Azteca, one of the two largest producers of Spanish language television programming in the world - said that the exchange offer is anticipated to close on or about March 31, subject to possible extension.

It said that it would retire one-third of the principal amount of the new notes in July and will repay the balance of the new notes in five equal annual installments.

Azteca Holdings further said that it was soliciting consents from the holders of its outstanding 10½% notes for amendments to the notes' indenture.

Azteca sold $150 million of the 10½% notes in January 2002. It did not indicate the amount of the notes currently outstanding.

Millicom Cellular extends exchange offer for 13½% '06 notes

Millicom International Cellular SA (Caa3) said on Monday (March 3) that it had extended its previously announced offer to exchange new debt for its outstanding 13½% senior subordinated discount notes due 2006, and the related consent solicitation. The offer was extended to 5 p.m. ET on March 7, subject to possible further extension, from the previous Feb. 28 deadline.

The company said that the rights of withdrawal for those bondholders who have already tendered their acceptance to the exchange offer and consent solicitation shall continue until the new expiration date, in accordance with the terms of the private offering documents.

AS PREVIOUSLY ANNOUNCED: Millicom, a Bertrange, Luxembourg-based telecommunications investor, said on Jan. 21 that it had begun an offer to exchange two issues of new debt for all of the outstanding 13½% notes, and had also begun a related solicitation of noteholder consents to proposed indenture changes.

Millicom initially said that the exchange offer and consent solicitation would expire at 5 p.m. ET on Feb. 20 (this was subsequently extended).

It said that the exchange offer was being made in a private offering only to U.S. holders of the existing notes who could be considered either "qualified institutional buyers" or "accredited investors" or to holders who are not "U.S. persons," as all of these terms are defined by the Securities Act of 1933.

The company said that holders of the existing notes validly tendering them for exchange will receive $600 of Millicom's newly issued 9% senior notes due 2005, plus $75 of Millicom's newly issued 4% senior convertible PIK (payment-in-kind) notes due 2005 per $1,000 of the existing notes.

It noted that the new 4% notes would be convertible into Millicom's common stock at any time after April 1 at a conversion price of $5 per share, which could result in a dilution to existing Millicom stockholders of approximately 22% (assuming the company issues no additional PIK notes in lieu of cash interest). At their maturity or upon their redemption, Millicom - at its option - may pay the then-outstanding principal amount of the 4% notes in whole or in part, plus the accrued and unpaid interest on the notes, either in cash or in shares of its common stock.

Millicom said that its wholly owned Millicom International Operations BV subsidiary will irrevocably and unconditionally guarantee both the new 9% notes and the new 4% notes.

On Feb. 20, Millicom said that it had extended the exchange offer to 5 p.m. ET on Feb. 28, subject to possible further extension, from the original Feb. 20 deadline.

Millicom also confirmed that it had been notified that an ad hoc committee of bondholders had been formed and had retained Houlihan Lokey Howard & Zukin as financial advisers and Orrick, Herrington & Sutcliffe as legal advisers. Millicom said it had conversations with this ad hoc committee, and was extending the exchange offer and consent solicitation "to facilitate the continued dialogue."

Filtronic repurchases some more of its 10% '05 notes

Filtronic plc (B1/B) said on Monday (March 3) that it bought back $6.5 million of its 10% senior notes due 2005 at a discount to par value. The notes will be cancelled, leaving $103.6 million of the notes outstanding.

Filtronic said that it has now has now bought back and cancelled a total of $66.4 million of the notes, since February, 2002.

AS PREVIOUSLY ANNOUNCED: Filtronic, a Shipley, West Yorkshire (U.K.) - based microwave subsystems designer and manufacturer, said on Feb. 8, 2002, that it had bought back US$16.75 million of the 10% notes at an undisclosed discount to par, out of the originally issued $160 million, leaving $153.25 million of the notes outstanding. Filtronic said it financed the repurchases from cash generated by its businesses.

Filtronic subsequently announced further repurchases of the 10% notes, at an undisclosed discount to par, on Feb. 13, 2002, Aug. 16, Sept. 16 and Feb. 14.

Alestra plans noteholder meeting to discuss tender and exchange offers for 12 1/8% '06 and 12 5/8% '09 notes

Alestra, S de RL de CV (Ca) said on Friday (Feb. 28) that will conduct a special meeting to discuss its fourth-quarter earnings and to update its noteholders and analysts on the progress of its previously announced restructuring and the cash tender offers, exchange offers and consent solicitations for its outstanding 12 1/8% senior notes due 2006 and 12 5/8% senior notes due 2009 which are currently in progress.

The company said that the meeting will be held at Morgan Stanley (1585 Broadway, New York) on March 7 at 9 a.m. ET; arrangements for those attending the meeting in person must be made in advance through Morgan Stanley by contacting the information number listed below or via e-mail at heather.hammond@morganstanley.com.

Alestra also said that interested parties may participate in the meeting via a telephone conference call; U.S. participants should dial up the conference at 800 230-1093; participants outside the U.S. should call +1 612 332-0226. Those participating by telephone are encouraged to dial in 15 minutes prior to the 9 a.m. ET start of the call. The meeting is expected to last no longer than 90 minutes.

A replay of the call will be available between 2:30 a.m. ET on March 8 and 6 p.m. ET on March 14; U.S. participants can dial up the replay at 800 475-6701; non-U.S. participants wishing to access the replay should call +1 320 365-3844. The access code is 676871.

Morgan Stanley & Co. Inc. (contact Heather Hammond at 212 761-1893 or 800 624-1808; international callers call collect at +1 212 761-1893) is acting as dealer manager and solicitation agent for the cash tender offers, exchange offers and the consent solicitations. D.F. King (call 212 269-5550) is the information agent.

AS PREVIOUSLY ANNOUNCED, Alestra, a provider of telecommunications services in Mexico based in San Pedro Garza Garcia, Mexico, said on Feb. 13 that it had launched cash tender offers, exchange offers and consent solicitations for all of its outstanding 12 1/8% and 12 5/8% notes ($270 million of the 12 1/8% notes and US$300 million of the 12 5/8% notes had been issued in May, 1999; the company did not disclose the amount of either note currently outstanding).

Alestra initially said the offers would expire at 11:59 p.m. ET on March 13 (this deadline was subsequently extended).

The company said it would offer either $970 principal amount of new senior step-up notes due May, 2008 and an early consent payment of $30 principal amount of those new notes OR a cash payment of $400 and an early consent payment of $30 per $1,000 principal amount of the outstanding 12 1/8% notes. The 2008 step-up notes will pay cash interest of 5% until May, 2006 and 7% thereafter.

It will offer either $970 principal amount of new senior step-up notes due February 2011, and an early consent payment of $30 principal amount of those new notes OR a cash payment of $400 and an early consent payment of $30 per $1,000 principal amount of the outstanding 12 5/8% notes. The 2011 step-up notes will pay cash interest of 5% until August, 2006 and 8% thereafter.

The early consent payments - either in cash or in new step-up notes - would be payable only to those holders of senior notes tendering their notes by the early consent payment deadline of 11:59 p.m. ET on Feb. 27 (this initial deadline was subsequently extended). Holders of Alestra's outstanding senior notes would be able to elect the applicable exchange offer, cash tender offer, or both, subject to pro ration. Holders tendering their senior notes in the offers will not receive any accrued and unpaid interest on those notes.

Alestra said that if the offers are consummated, the restructuring, including the tender offers, the early consent payments and expenses, will be financed by a capital contribution from Alestra's shareholders in the amount of $80 million, which will be provided 51% by Onexa and 49% by AT&T. The offers are conditioned, among other things, on the receipt of tenders of at least 95% of the outstanding senior notes.

On Thursday (Feb. 27), Alestra said that it had that it had extended its previously announced cash tender offers, exchange offers and consent solicitations to 11:59 p.m. ET on March 27, subject to possible further extension, from the originally announced March 13 deadline. The early consent deadline for the offers was extended to 11:59 p.m. ET on March 13, subject to possible further extension, from the originally announced Feb. 27.

The company said that holders who had already tendered their notes under the terms of the exchange offers or the cash tender offers may withdraw those tendered notes at any time prior to March 13.

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