American Greetings sets price in tender for 11¾% notes

New York, May 7 - American Greeting Corp. set the pricing in its tender offer for its 11¾% senior subordinated notes due 2008.

For notes tendered before the consent deadline, the company will pay $1,162.37 per $1,000 principal amount. For notes tendered after the price is $1,142.37 per $1,000 principal amount.

The levels were fixed at 2 p.m. ET on Friday.

American Greetings said on April 28 that it received sufficient consents from holders of the 11¾% notes to amend the indenture.

The consent solicitation expired at 5 p.m. ET on April 27.

American Greetings announced on April 14 that it had begun a cash tender offer for its $196.4 million of 11¾% senior subordinated notes due 2008.

The Cleveland greeting card company was also soliciting consents to amend the indenture to eliminate certain restrictive covenants and events of default.

The transaction is intended to reduce future interest expense and increase financial flexibility, the company said.

American Greetings said it will set the purchase price at 2 p.m. ET on May 7. The price for each $1,000 principal amount of notes will be based on the redemption price of the notes on their first call date of July 15, 2005 plus scheduled interest to that date, discounted by a yield to that date of the 1.5% U.S. Treasury note due July 31, 2005 plus 50 basis points.

The total calculated includes a $20 per $1,000 principal amount consent payment that will only be paid to holders who tender their notes and deliver consents by 5 p.m. ET on April 27.

The tender offer expires at 9 a.m. ET on May 12.

Holders will also receive accrued interest up to but not including the payment date.

Conditions to the offer include execution of an amendment to the company's revolving credit facility and the tender of and the receipt of consents from holders of at least a majority of the principal amount of the notes.

UBS Securities LLC is the dealer manager and solicitation agent (888 722-9555 ext. 4210). Global Bondholder Services is the information agent (212 430-3774).

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