Revlon tenders for 12% notes and remaining 8 1/8% and 9% notes

New York, April 19 - Revlon Inc. (Caa1/CCC-) said that it has begun tender offers for three series of its outstanding bonds as part of a comprehensive debt refinancing designed to lower its annual interest expense and extend the maturities of much of its debt.

Revlon, a New York-based cosmetics maker, said that its wholly-owned Revlon Consumer Products Corp. subsidiary is offering to purchase $555 million of notes, consisting of any and all of its $363 million principal amount of outstanding 12% senior secured notes due 2005, any and all of its $116.2 million principal amount of remaining outstanding 8 1/8% senior notes due 2006, and any and all of its $75.5 million principal amount of remaining outstanding 9% senior notes due 2006.

It is also soliciting consents from the holders of the 12% notes to proposed indenture changes.

Earlier this year, Revlon had successfully exchanged new equity for about $133 million of the $250 million originally issued 8 1/8% notes and about $175 million of the $250 million originally issued 9% notes as part of an overall exchange offer program, completed March 22. That reduced its debt and increased its common equity by more than $800 million.

Revlon set a consent deadline for the 12% noteholders of 5 p.m. ET on April 29 and said the tenders offers would expire at 3 p.m. ET on May 14, subject to possible extension.

Revlon said that it plans to set the total cash consideration that it will offer to holders of the 12% notes on the second business day before the offer (for a tentative pricing date of May 12, subject to possible extension) using a formula based on a 75 basis point fixed spread over the yield to maturity on the pricing date of the reference security, the 1.875% U.S. Treasury note due Nov. 30, 2005.

Total consideration will include a consent payment equal to $20 per $1,000 principal amount for those holders who validly tender their notes by the consent deadline and do not subsequently withdraw them.

The proposed indenture changes would eliminate substantially all of the restrictive covenants in the indenture and release the guarantees of Revlon Consumer Products Corp.'s obligations, and the collateral securing the company's obligations and those of its guarantors.

Holders tendering their notes after the consent deadline has expired will not receive the consent payment as part of their consideration, and all tendering noteholders will also receive accrued and unpaid interest. Tendering holders of the 12% notes have certain withdrawal rights, described in full in the official offering materials.

The company said that it will offer cash consideration for the 8 1/8% notes of 101.604% of the principal amount tendered (the applicable redemption price until Feb. 1, 2005, plus 25 basis points), and will offer cash consideration for the 9% notes of 103.25% of the principal amount tendered (the applicable redemption price until Nov. 1, plus 25 basis points), with all tendering holders of both series of notes also to receive accrued and unpaid interest.

Completion of the tender offers for the three series of notes and the consent solicitation for the 12% notes will be subject to various conditions, including - but not limited to - Revlon Consumer Products Corp obtaining the required consents in the consent solicitation, as well as its completion of certain financing transactions.

In connection with and as a condition to the tender offers, Revlon expects to enter into a new credit facility of some $680 million with a consortium of banks, which will replace its existing $312 million credit facility. The new credit facility is expected to be executed concurrently with the consummation of the tender offers, and it is expected that a portion of the amounts borrowed will be used to purchase notes validly tendered and not withdrawn and to repay the existing credit facility. The new facility is expected to consist of a term loan and a multi-currency revolving credit facility.

In addition, as a condition to the tender offers, Revlon expects to issue $400 million principal amount of new senior unsecured debt in a Rule 144A transaction, subject to market and other customary conditions. A portion of the net proceeds from the new issuance, together with borrowings under the new credit facility, will be used by Revlon to purchase notes validly tendered and not withdrawn in the tender offers, to repay amounts outstanding under the old credit facility, and to pay fees and expenses.

Revlon further said that after completion of the tender offers and the 12% consent solicitation, it intends to redeem any 8 1/8% notes, the 9% notes and/or the 12% notes that might remain outstanding following the tender offers. If called for redemption, the notes will be called at the redemption prices set forth in their respective indentures.

Citigroup Global Markets Inc. is acting as dealer manager for the tender offers (call 800 558-3745 or collect at 212 723-6106).

D.F. King & Co. Inc. is the information agent (call 800 949-2583 or collect at 212 269-5550).

Holders of the 12% notes may obtain a hypothetical quote of the consideration to be paid by calling either the dealer manager or the information agent.

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