Allied Waste tenders for portion of 10% notes

New York, March 22 - Allied Waste Industries, Inc. said that its wholly-owned Allied Waste North America, Inc. (Ba3/BB-) subsidiary has begun a cash tender offer for up to $1 billion principal amount of its 10% senior subordinated notes due 2009.

It set 5 p.m. ET on April 2 as the early tender deadline and said that the tender offer would expire at 9 a.m. on April 20, subject to possible extension.

Allied Waste, a Scottsdale, Ariz.-based waste disposal company which issued $2 billion of the notes in July 1999, is offering to purchase up to $1 billion of the notes for $1,073.50 per $1,000 principal amount, plus accrued and unpaid interest up to but excluding the settlement date. The total includes a $10 per $1,000 principal amount early tender premium for those holders tendering by the early tender deadline. Holders tendering after the early tender deadline but before the expiration will receive $1,063.50.

If the total principal amount of notes validly tendered under the offer and not properly withdrawn exceeds $1 billion, Allied Waste will accept notes for purchase on a pro rata basis based on the principal amount tendered.

Allied Waste said that it intends to take advantage of favorable market conditions and interest rates to refinance the notes for which it is tendering, allowing it to reduce its overall interest cost and extend maturities. Concurrently with the tender offer, Allied Waste is seeking to amend its existing senior credit facility to, among other things, give it the ability to issue up to $1.1 billion of debt, of which up to $500 million may consist of senior secured debt and the remainder senior unsecured debt. The company said that this would complement the flexibility that Allied Waste currently has under the terms of its existing senior credit facility to issue senior subordinated debt.

The tender offer is contingent upon the satisfaction of certain conditions, including the receipt by Allied Waste of about $1 billion in gross proceeds through a combination of additional borrowings under its senior credit facility and one or more public and/or private securities offerings to be completed prior to the settlement date. The company warned that should any of the conditions not be satisfied, Allied Waste would not be obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, or could terminate the tender offer.

UBS Securities LLC (888 722-9555 ext. 4210) and Citigroup Global Markets Inc. (800 558-3745) are dealer managers for the tender offer. D.F. King & Co., Inc. is the information agent (888 628-9011 or 212-269-5550).

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