Revlon begins tender for 12% notes

New York, June 23 - Revlon, Inc. (B2/B-) said its Revlon Consumer Products Corp. subsidiary had begun a cash tender offer to purchase any and all of its $363 million principal amount of outstanding 12% senior secured notes due 2005 as part of a previously announced series of refinancing transactions.

It set a consent deadline of 5 p.m. ET on July 6, and said the tender offer and related consent solicitation would expire at 5 p.m. ET on July 21.

Revlon expects to have initial settlement on July 9 for any notes tendered by that date followed by a final settlement shortly after the expiration date. However Revlon said it reserves the right to extend the initial settlement date up to and including the final settlement date. Noteholders have limited withdrawal rights.

Revlon plans to determine the price it will pay for the notes on July 6, using a previously outlined formula based on a reference security and said that the total consideration for notes tendered by the consent deadline would include a consent payment equal to 2% of the principal amount.

Revlon indicated that Revlon Consumer Products intends to redeem any 12% notes that remain outstanding following the tender offer at the redemption prices in the indenture.

Citigroup Global Markets Inc. is dealer manager for the tender offer and consent solicitation (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.

As previously announced, Revlon, a New York-based cosmetics maker, said on June 21 that Revlon Consumer Products was planning to shortly begin a cash tender offer to purchase any and all of its outstanding 12% notes, as part of the series of refinancing transactions.

The company said that Revlon Consumer Products was planning to repurchase the notes at a price to be calculated using a 75 basis point spread over the yield to maturity of a reference security, the 1 7/8% U.S. Treasury note due Nov. 30, 2005. Revlon said that as part of the planned tender offer, Revlon Consumer Products would solicit consents from holders of the 12% notes for certain proposed amendments that would eliminate substantially all of the restrictive covenants and release the guarantees of Revlon Consumer Products' obligations and the collateral securing the obligations of Revlon Consumer Products and the guarantors.

The company said the notes would be refinanced using the proceeds of a new credit facility.

It said that consummation of the tender offer and consent solicitation would be subject to various conditions including Revlon Consumer Products' entering into the new credit facilities and Revlon Consumer Products' obtaining the required consents in the consent solicitation.

Revlon said that Revlon Consumer Products had signed an agreement with Citicorp USA, Inc. and Citigroup Global Markets Inc. for a fully committed financing to refinance and extend to 2010 the maturities on the company's debt that matures in 2005. The refinancing transactions follow the consummation this past March of Revlon's successful exchange offers, which reduced debt and increased equity by more than $800 million.

It said that Revlon Consumer Products expects to enter into new credit facilities with Citigroup and a syndicate of lenders to refinance its existing credit facility, which has about $290 million of outstanding borrowings, refinance its $363 million of 12% notes, and to cover $95 million of fees and expenses, tender costs and accrued interest. Revlon Consumer Products currently expects that the new credit facilities will be for a total of $910 million, comprised of a $750 million term loan and a $160 million asset-based multi-currency revolving credit facility.

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