Buffets to repurchase 11¼% notes with new-deal, facility proceeds

New York, Jan. 27 - Buffets Inc. (B3/B) plans to repurchase a portion of its outstanding 11¼% senior subordinated notes due 2010 and may redeem some of two series of subordinated notes due 2011 issued by a subsidiary using the anticipated proceeds from a new bond offering and an amended credit facility.

Buffets Holdings, Inc., parent of Buffets Inc., an Eagan, Minn.-based operator of buffet-style restaurants, announced plans to offer new senior discount notes for sale in a Rule 144A offering, with expected proceeds of around $100 million, and said that parent Buffets Inc. intends to enter into an amended senior secured credit facility for about $310 million.

The companies plan to use $50 million of the proceeds to repurchase the 11¼% notes (Buffets sold $230 million of the notes in June 2002).

The companies said that other proceeds from the note sale and amended credit facility would be used to refinance all of Buffets Inc.'s outstanding term loan debt under its existing credit facility and pay transaction fees and expenses.

The companies might also repay bank indebtedness, redeem Buffets Holdings' series A senior subordinated and series B junior subordinated notes due 2011 or make a distribution to stockholders.

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