Laidlaw tenders for 10¾% notes, plans to redeem Greyhound's 11½% notes, 8½% convertibles

New York, June 1 - Laidlaw International, Inc. announced a recapitalization that includes a tender offer for its $403.5 million of 10¾% senior notes due 2011, the future redemption of Greyhound Lines, Inc.'s $150 million 11½% senior notes due 2007 and $5 million 8½% convertible debentures due 2007 and replacement of its existing revolving credit facility.

Funding for the transactions will come from a new $300 million term loan and a new $300 million revolving credit facility plus cash on hand.

Laidlaw will also take over Greyhound's bank debt.

"The sale of the healthcare companies earlier in the year enabled us to focus on Laidlaw's core transportation businesses, while also substantially strengthening the balance sheet," said Kevin Benson, president and chief executive officer of Laidlaw, in a news release. "The transactions that we are outlining today [Wednesday] take advantage of that strength to further improve our financial position and our profitability over the next several years.

"Completion of our financing plans will significantly reduce the cost of our debt and put to work the cash we generated with the healthcare sale."

No details were announced on the future redemptions.

But the Naperville, Ill., school bus, inter-city bus and public transit company said the tender offer for the 10¾% notes will run through 5 p.m. ET on June 29, with the consent solicitation ending at 5 p.m. ET on June 15.

For each $1,000 principal amount of notes tendered by the consent date, Laidlaw will pay the present value on the initial payment date of the $1,053.75 per $1,000 principal amount redemption price on the first call date of June 15, 2007 plus the interest payments up to June 15, 2007, discounted using a spread of 75 basis points over the 4.375% Treasury note due May 15, 2007.

Pricing will be fixed at 2 p.m. ET on June 15 unless the offer is extended.

Initial payment will occur promptly after the new financing has been arranged, currently expected to be on June 23.

Laidlaw is offering a consent payment of $20.00 per $1,000 principal amount to holders who tender and deliver consents by the consent date.

The consent solicitation is to eliminate substantially all of the affirmative and restrictive covenants and certain events of default and related provisions in the note indenture.

Laidlaw needs consents from holders of at least a majority of the notes.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and UBS Securities LLC at (888 722-9555 x4210 or 203 719-4210) are dealer managers and solicitation agents. D.F. King & Co. is information agent (800 431-9645 or 212 269-5550).

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