Mrs. Fields extends and amends tender and exchange offers for 10 1/8% notes

New York, March 9 - Mrs. Fields Famous Brands LLC (B3/CCC+) said that it was again extending its previously announced 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 also extended the alternative offer to allow certain holders to exchange their existing notes for new debt and said it was also amending certain provisions of the offers. Those offers, which had been scheduled to expire at midnight ET on March 8, have now been extended to 11 a.m. ET on March 15 (the anticipated closing time of the company's Rule 144A sale of new junk bonds), subject to possible further extension.

As of 5 p.m. ET on March 8, noteholders had tendered $84,227,500 principal amount of the notes under the exchange offer and had tendered $26,656,500 principal amount of the notes under the tender offer, together representing 79.2% of the notes; on March 8, when it last extended the tender and exchange offers, Mrs. Fields said that by 5 p.m. ET on March 5, $83,727,500 principal amount of the notes had been tendered under the exchange offer and $26,656,500 principal amount of the notes under the tender offer, together representing 78.8% of the outstanding notes.

Besides extending the offers, Mrs. Fields amended the terms, so that the "minimum condition" to the offers, which requires that a certain minimum percentage of the notes be tendered or exchanged, will be reduced to 86% from 95% originally.

It also amended the definition of the "supplemental indenture condition," so that a supplemental indenture may be executed by Mrs. Fields and the notes' trustee at any time after 4 p.m. ET March 9, so long as the company has received valid and unrevoked consents from the holders of at least a majority in principal amount of the notes, whether or not the minimum condition is then satisfied.

And it extended withdrawal rights relating to the notes previously tendered, so that they could be withdrawn up until the later of either 4 p.m. ET on March 9 or such time as the supplemental indenture is executed.

As previously announced, 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 as TCBY, a frozen yogurt franchise - said on Feb. 6 that it had begun a tender offer for all of the $140 million of outstanding 10 1/8% senior notes scheduled to come due on Dec. 1 by Mrs. Fields Original Cookies. It also said that it was concurrently offering certain of its noteholders the option of exchanging their outstanding notes for new debt that it planned to issue.

Mrs. Fields originally said the tender and exchange offers would expire at midnight ET on March 5 (as noted, the deadline was subsequently extended).

In the tender offer, the company said it would purchase the 10 1/8% notes at a cash price of $850 per $1,000 principal amount of notes tendered.

In the exchange offer, the company said that holders of notes falling into the category of "qualified institutional buyers" and "institutional investors," as defined by the Securities Act of 1933, as amended, could elect, instead, to exchange their notes, on an even-up, 1-for-1 basis, for new 9% senior secured notes due 2011 that the company said it was planning to issue.

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

Mrs. Fields said it was 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 would be considered to have consented to the proposed amendments.

The company said the tender and exchange offers would be subject to various conditions, originally including the tender for purchase or exchange of at least 95% of the existing notes (this percentage was subsequently reduced to 86%, as noted).

Other conditions included execution of a supplemental indenture incorporating the proposed indenture amendments; 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 $121.7 million face amount of new 11% senior secured notes due 2011 in a Rule 144A transaction, and said that it would issue new 9% senior secured notes due 2011 in the same principal amount as the principal amount of notes tendered for exchange in the aforementioned exchange offer; those 9% notes would have the same terms as the notes to be sold under the Rule 144A deal, but will have a lower coupon interest rate, as noted, and lower optional redemption premiums. Completion of the sale of the 144A notes would meanwhile be conditioned upon the consummation of the tender and exchange offers.

Mrs. Fields said that assuming the company was to accept for purchase or exchange all of the notes tendered for either purchase or for exchange under its tender offer and exchange offer, it currently plans to redeem any other existing notes not tendered by their holders or not accepted for payment or exchange. Such a redemption would take place shortly after the expiration of the tender offer and the exchange offer, at a redemption price equal to the principal amount of the untendered existing notes, plus accrued and unpaid interest up to, but not including, the redemption date.

The company stressed, however, that such proposed plans do not constitute an official notice of redemption, which Mrs. Fields intends to make at a later date - if necessary - in accordance with the terms of the notes' indenture.

Jefferies & Co. Inc. is the exclusive dealer manager and solicitation agent for the tender offer (call 310 575-5232). Requests for documentation relating to the offers can be made to The Bank of New York, the tender and exchange agent (call 212 815-3738).

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