Revlon extends tender offers for three series of notes

New York, May 12 - Revlon, Inc. (Caa1/CCC-) said that its wholly-owned Revlon Consumer Products Corp. subsidiary extended its previously announced tender offers for its outstanding 8 1/8% senior notes due 2006, its 9% senior notes due 2006 and its 12% senior secured notes due 2005, as well as the related consent solicitation for the 2005 notes.

The tender offers will now all expire at 5 p.m. ET on May 21, subject to possible further extension; the offers for the 8 1/8% notes and the 9% notes were extended from the original deadline of 3 p.m. ET on May 14, while the offer for the 12% notes was extended from the previous deadline of 5 p.m. ET on May 14.

Through noon ET on May 12, holders had tendered $360.07 million of the 12% notes, $18.125 million of the 8 1/8% notes and $7.285 million of the 9% notes.

As previously announced, Revlon, a New York-based cosmetics maker, said on April 19 that it had 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 said that its wholly owned Revlon Consumer Products Corp. subsidiary was offering to purchase $555 million of notes, consisting of any and all of its $363 million principal amount of outstanding 12% notes, any and all of its $116.2 million principal amount of outstanding 8 1/8% notes and any and all of its $75.5 million principal amount of outstanding 9% notes.

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 over $800 million.

Under the latest offer, it also began soliciting consents from the holders of the 12% notes to proposed indenture changes.

Revlon initially set a consent deadline for the 12% noteholders of 5 p.m. ET on April 29 and initially said the tenders offers would expire at 3 p.m. ET on May 14, subject to possible extension (Revlon subsequently said that holders could continue to tender their 12% notes up to the offer expiration and still receive total consideration, and subsequently extended that expiration deadlines).

Revlon said that it would set the total cash consideration that it will offer to holders of the 12% notes on the second business day before the offer expires (the tentative pricing date will now be May 19, subject to possible further 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 2% of the principal amount of the notes tendered (i.e. $20 per $1,000 principal amount) for those holders who validly tender their notes by the consent deadline and do not subsequently withdraw them, thus consenting to the proposed indenture changes, which 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.

The company originally said that 12% holders tendering their notes after the consent deadline has passed would not receive the consent payment as part of their consideration, although this prohibition was later dropped so that all holders tendering by the expiration deadline will receive total consideration, including the consent payment. All tendering holders from all series of notes being tendered for will also receive accrued and unpaid interest.

It said that tendering holders of the 12% notes have certain withdrawal rights, described in full in the official offering materials (the withdrawal deadline was subsequently formally announced).

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 said it 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, concurrently with and as a condition to the tender offers, Revlon expects to issue $400 million principal amount of new senior unsecured debt, subject to market and other customary conditions. A portion of the net proceeds received by Revlon from the new debt 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, 9% notes and/or 12% notes that remain outstanding.

On April 30, Revlon said that it had received a sufficient number of consents to the proposed indenture changes from the 12% noteholders. It said they had tendered about $352.971 million of the notes, or 97% of the outstanding amount, (and thus had also delivered their consents) by the previously announced consent deadline of 5 p.m. ET on April 29.

It said the supplemental indenture incorporating the amendments would not take effect unless Revlon Consumer Products completes the tender offer for the notes, in accordance with previously outlined terms.

Revlon additionally said that it has extended the deadline by which holders of the 12% notes had to tender in order to receive full total consideration, including a previously announced consent payment, to the tender offer expiration deadline, from the April 29 consent deadline.

It further said that the tender expiration deadline for the 12% notes was moved back to 5 p.m. ET on May 14, subject to possible further extension, from the originally announced 3 p.m. ET on that day, explaining that in order to allow holders of the 12% notes to utilize the DTC Automated Tender Offer Program throughout the entire tender offer, the expiration had to be pushed back to 5 p.m. ET. (The expiration deadline for the 12% notes, and for each of the other series of notes being tendered for, was subsequently extended further).

Revlon also said that its announcement constituted a formal declaration of the withdrawal deadline for the offer, as described in the official offer to purchase documents; accordingly, holders who up to that point had validly tendered their 12% notes would no longer be permitted to withdraw the notes and their related consents; holders tendering any 12% notes from that point up to the expiration date of the tender offer would also not be permitted to withdraw those notes.

Citigroup Global Markets Inc. is dealer manager for the tender offers (800 558-3745 or collect at 212 723-6106). D.F. King & Co., Inc. is the information agent (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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