Mrs. Fields tendering for 10 1/8% notes, also makes exchange offer

New York, Feb.6 - Mrs. Fields Famous Brands LLC (B3) said that it has begun a tender offer for all of the $140 million of outstanding 10 1/8% senior notes scheduled to come due on Dec. 1 (Caa3/CCC) issued by its corporate parent, Mrs. Fields Original Cookies Inc.

The company is concurrently offering certain of its noteholders the option of exchanging their outstanding notes for new debt that it plans to issue.

Mrs. Fields Famous Brands, a subsidiary of Mrs. Fields' Original Cookies, a Salt Lake City-based franchisor in the premium snack-food industry - affiliated retailers operate under such nameplates as Mrs. Fields and Great American Cookie Co., as well TCBY, a frozen yogurt franchise - said the tender and exchange offers will expire at midnight ET on March 5, subject to possible extension.

In the tender offer, the company is offering to purchase the 10 1/8% notes at a cash price of $850 per $1,000 principal amount of notes.

In the exchange offer, qualified institutional buyers and institutional investors may elect instead to exchange their notes on a 1-for-1 basis for new 9% senior secured notes due 2011.

Whether tendering for exchange or for purchase, holders also will receive a cash payment equal to accrued and unpaid interest on the existing notes.

Mrs. Fields is also soliciting the consent of the 10 1/8% noteholders for proposed changes in the note's indenture. Holders validly tendering notes either for purchase in cash or for exchange will be considered to have consented to the proposed amendments.

The tender and exchange offers are subject to various conditions, including the tender for purchase or exchange of at least 95% of the existing notes; execution of a supplemental indenture incorporating the proposed indenture amendments; and the completion of Mrs. Field's planned private placement sale of new senior secured notes, which the company announced in tandem with the tender and exchange offers. The company announced plans to sell up to $121.7 million face amount of new 11% senior secured notes due 2011, saying it will issue new 9% senior secured notes due 2011 in the same principal amount as the principal amount of notes tendered for exchange in the exchange offer. The 9% notes will have the same terms as the notes to be sold under the Rule 144A deal but will have a lower coupon and lower optional redemption premiums. Completion of the sale of the Rule 144A notes is conditioned upon the consummation of the tender and exchange offers.

Mrs. Fields said that assuming the company accepts for purchase or exchange all of the notes that are tendered for either purchase or exchange, it currently plans to redeem any remaining notes shortly after the expiration of the tender offer and the exchange offer. The redemption will be at the principal amount of the untendered existing notes, plus accrued and unpaid interest up to, but not including, the redemption date.

Jefferies & Co. Inc. is the dealer manager and solicitation agent for the tender offer (310 575-5232). The Bank of New York is the tender and exchange agent (212 815-3738).

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