UAP, United Agri Products get consents to amend 8¼%, 10¾% notes

New York, May 11 - UAP Holding Corp. (Caa2/B-) and its wholly owned subsidiary, United Agri Products, Inc. (B3/B) said they had received the necessary consents to amend the indentures of UAP's 10¾% senior discount notes due 2012 and United Agri Products' 8¼% senior notes due 2011 as part of the previously announced tender offers for the notes and related consent solicitations.

As of 5 p.m. ET on May 10, when the consent solicitation portion of the tender offer expired as scheduled without extension, $122.5 million principal amount at maturity of UAP's 10¾% notes, or almost all of the outstanding amount, and $225 million of the United Agri Products' 8¼% notes, the entire outstanding amount, had been validly tendered and not subsequently withdrawn.

UAP and United Agri Products said the consents may no longer be validly withdrawn unless the tender offers and the consent solicitations are terminated without any notes having been purchased.

As a result of receiving the consents of holders of at least a majority in principal amount of each series of notes, UAP Holdings and United Agri Products will promptly execute and deliver supplemental indentures to the indentures, and will promptly execute and deliver amendments to the related registration rights agreements. The supplemental indentures and amendments to the registration rights agreement will not, however, become effective unless and until UAP Holdings and United Agri Products accept notes tendered for payment and purchase.

The tender offers are scheduled to expire on May 24, subject to possible extension. Holders tendering notes now that the consent deadline has passed will not be eligible to receive the previously announced consent payment.

UAP and United Agri Products - a Greeley, Colo.-based distributor of seeds and agricultural chemicals said on April 27 that UAP was offering to purchase for cash any and all of its outstanding $125 million principal amount at maturity of 10¾% notes, while United Agri Products would purchase for cash any and all of its outstanding $225 million of 8¼% notes. The companies said they were also soliciting noteholder consents to proposed indenture changes that would eliminate most of the restrictive covenants in the respective indentures, and would eliminate the registration rights and liquidated damages provided for in the registration rights agreements.

The companies initially set a consent deadline of May 7, which has since been extended, and said the tender offers would expire at 9 a.m. ET on May 24, subject to possible extension.

UAP initially said the total to be paid for the 10¾% notes would be $819.04 per $1,000 principal amount at maturity, including a $20 per $1,000 consent payment payable only to holders who tender by the consent deadline. That consideration was subsequently amended.

United Agri Products said the total to be paid for the 8¼% notes would be a blended price, based on the $1,082.50 per $1,000 principal amount price at which United Agri Products could redeem a portion of the notes with the proceeds of an equity offering, and the present value of future cash flows up to and including the first call date of Dec. 15, 2007, based on the assumption that the notes will be redeemed in full at $1,041.25 per $1,000 principal amount on that date, discounted at a rate equal to 137.5 basis points over the yield to maturity on the 3 % U.S. Treasury Note due Nov. 15, 2007.

United Agri Products said the total consideration on the 8¼% notes would include a $20 per $1,000 principal amount consent payment for holders tendering their notes by the consent deadline, and it will also include accrued but unpaid interest on the notes up to, but not including, the payment date.

Holders tendering notes would be required to consent to the proposed indenture amendments and the registration rights agreement changes.

On May 7, UAP and United Agri Products announced extension of the offer's consent deadline to 5 p.m. ET on May 10, subject to possible further extension, from the originally announced 5 p.m. ET on May 7, and said that as of 5 p.m. ET on May 6, $171.695 million principal amount of the 8¼% notes and $26.67 million principal amount at maturity of the 10¾% notes had been validly tendered and not subsequently withdrawn.

UAP also said it had amended the total consideration it is offering to the holders of the 10¾% notes; the consideration would now be calculated as the product of the accreted value of the 10¾% notes on the date that is 30 days immediately following the payment date for the 10¾% notes' tender offer and 116.125%, of which $20 would be the consent payment. The originally announced total consideration to be paid for the 10¾% notes was to have been $819.04 per $1,000 principal amount at maturity, of which $20 was the consent payment.

On May 10, United Agri Products said it had set the price it will pay for the 8¼% notes. The total consideration will be $1,123.56 per $1,000 principal amount of notes based on an assumed payment date of May 28. The total includes a consent payment of $20 per $1,000 principal amount for holders who tendered by the May 10 consent deadline.

The companies said the tender offers would each be conditioned on, among other things, the receipt by the company by the consent deadline of consents from the holders of at least a majority of the outstanding principal amount of the 8¼% notes and a majority of the outstanding principal amount at maturity of the 10¾% notes. "Majority" excludes any notes already owned by the companies or their affiliates.

They are also conditioned upon United Agri Products amending its existing revolving credit facility and entering into a new senior secured second-lien term loan facility, the net proceeds of which will be used to pay the consideration for the notes purchased in the tender, and upon consummation of UAP Holdings' offering of Income Deposit Securities, the net proceeds of which will be used, among other things, to pay the consideration for the Notes purchased in the tender offers.

UBS Investment Bank is dealer manager (call the Liability Management Group at 888 722-9555 x4210 or collect at 203-719-4210). MacKenzie Partners, Inc. is the information agent (call collect at 212 929-5500 or 800 322-2885). JP Morgan Chase Bank is the depositary for the offer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.