Pep Boys holders tender 58% of 7% 2005 notes, sufficient consents for indenture changes

By Paul Deckelman

New York, Dec. 13 - The Pep Boys - Manny, Moe & Jack said holders of more than a majority of its outstanding 7% notes due 2005 had tendered their notes and had delivered consents to proposed indenture amendments as part of its tender offer for the bonds, allowing the company and the notes' trustee to execute a supplemental indenture incorporating the desired changes.

It said that as of the consent deadline - which expired as scheduled at 5 p.m. ET on Dec. 10, without exemption - holders had tendered $58.18 million of the notes, or about 58% of the outstanding amount.

The company said that the indenture changes would not become operative until it has purchased all the notes tendered by the consent deadline on the previously announced first settlement date, which is expected to be Dec. 14.

The tender offer meantime continues and is scheduled to expire on Dec. 28, subject to possible extension.

As previously announced, Pep Boys - a Philadelphia-based automotive aftermarket and service chain - said on Nov. 29 that it had begun a cash tender offer for any and all of its $100 million principal amount of outstanding 7% notes and was also soliciting noteholder consents to proposed amendments that would, among other things, eliminate all of the restrictive covenants and all event-of-default provisions, except for the failure to pay principal or interest on the securities.

It set a now-expired consent deadline of 5 p.m. ET on Dec. 10 and an expiration deadline of 12:01 a.m. ET on Dec. 28, subject to possible extension.

Pep Boys said noteholders validly tendering their notes by the consent deadline would receive total consideration of $1,018.50 per $1,000 principal amount. The total consideration would include a $15 per $1,000 consent payment. Noteholders tendering their notes after the consent deadline but before the offer expiration would receive tender offer consideration of $1,003.50 for each $1,000 principal amount but would not receive the consent payment. All tendering noteholders would also receive accrued and unpaid interest up to but not including the applicable settlement date. The first settlement date, for holders tendering their notes by the consent deadline, would take place promptly after the consent deadline. The final settlement date, for holders tendering their notes after the consent deadline, would take place promptly after the offer expiration.

The company said holders tendering their notes would be required to consent to the proposed indenture amendments.

It said the offer would be subject to the satisfaction of certain conditions, including Pep Boys' receipt of tenders representing a majority of the principal amount of the outstanding notes, which has now been met, and the receipt of financing on acceptable terms for an amount sufficient to complete the offer (Pep Boys separately announced on Nov. 29 plans to raise $150 million through a public offering of 10-year senior subordinated notes; on Dec. 8 the company successfully priced an upsized $200 million offering of new 7½% notes due 2014).

Goldman, Sachs & Co. is the dealer manager and solicitation agent. Global Bondholder Services is the information agent and tender agent (866 857-2200 or call collect at 212 357-7867).

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