Nortek extends consent deadline for three series of notes, sets 9 7/8% offer pricing

New York, Aug. 3 - Nortek Holdings Inc. said it extended the consent deadline on its previously announced tender offers for its 10% senior discount notes due 2011 (Caa1/B-) and for the 9 7/8% senior subordinated notes due 2011 (B3/B-) and floating-rate notes due 2010 (B1/B+) issued by its Nortek Inc. subsidiary. It also set the consideration it will pay to holders of the 9 7/8% notes, using a previously announced formula.

The consent deadline for all three series of notes has now been extended to midnight ET on Aug. 4, subject to possible further extension, from the originally announced midnight ET on Aug. 2.

As of 5 p.m. ET on Aug. 2, 97% of the principal amount at maturity of the outstanding 10% notes, about 94% of the outstanding 9 7/8% notes and around 96% of the outstanding floating-rate notes had been validly tendered under the terms of the tender offers and consent solicitations and had not been withdrawn.

The company also said that it had set the total consideration on the 9 7/8% notes at $1,165.14 per $1,000 principal amount of notes tendered and accepted for purchase by the company. The total consideration includes a $20 per $1,000 principal amount consent payment payable only to those holders tendering their notes (and thus delivering consents to proposed indenture changes) by the now-extended consent deadline, and assumes a settlement date of Aug. 18. All tendering holders are to also receive accrued interest on the notes.

All other terms and conditions of the offers, including the Aug. 17 scheduled expiration, remain unchanged.

As previously announced, Nortek, a Providence, R.I.-based maker of building, remodeling and indoor environmental control products, said on July 20 that it had started a cash tender offer for all of its 10% notes, while its Nortek Inc. subsidiary had started tender offers for its 9 7/8% and floating-rate notes.

The companies are also soliciting consents to amend or eliminate most of the restrictive covenants in the note indentures.

The tender offer and consent solicitations are being undertaken in connection with the proposed acquisition of Nortek Holdings by affiliates of Thomas H. Lee Partners LP.

Nortek initially set a consent deadline of Aug. 2 (which was subsequently extended) and said that the tender offers would end at 9 a.m. ET on Aug. 17, subject to possible extension.

Nortek said it would pay total consideration of $1,031.25 per $1,000 principal amount for the floating-rate notes, plus accrued interest up to the settlement date.

For the 10% notes, Nortek said it would pay total consideration of 115.25% of the accreted value of the notes as of the payment date.

And for the 9 7/8% notes, Nortek initially said it would pay total consideration, to be calculated, based on a yield to their first call date of June 15, 2006 calculated as 75 basis points over the yield to maturity on the 2¾% U.S. Treasury note due June 30, 2006, plus accrued interest to the settlement date (on July 29, Nortek amended its offer, with total consideration for the 9 7/8% notes to now be based on a 50 basis point spread over the reference Treasury issue; all other terms and conditions of the offer were unchanged).

The total consideration for all three series of notes includes a $20 per $1,000 principal amount consent payment payable only to holders tendering by the consent deadline.

The company said tendering holders would be required to consent to the amendments, and the consent payment would be paid only to holders who tender by the deadline.

The tender offer is conditional on, among other things, the receipt of consents from holders of at least a majority of the outstanding notes of each issue and completion of Nortek's acquisition by Thomas H. Lee.

UBS Securities LLC (contact Liability Management Group at 888 722-9555 x4210 or call collect 203 719-4210) and Credit Suisse First Boston LLC (contact Liability Management Group at 800 820-1653 or call collect 212 325-2547) are dealer managers. MacKenzie Partners Inc. is the information agent (call collect 212 929-5500 or 800 322-2885).

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