Nutritional Sourcing tender for 10 1/8% notes oversubscribed, price set at high end

New York, June 15 - Nutritional Sourcing Corp. said its tender offer for its 10 1/8% senior secured notes due 2009 ended oversubscribed.

By the deadline of 5 p.m. ET on June 15, holders had tendered $58.005 million of the notes, more than the maximum $38 million the company said it would accept. That response means pricing is at the top end, being fixed at $830 per $1,000 principal amount.

Because of the strong response, tenders will be pro rated using a factor of 65.51%.

Nutritional Sourcing said on May 17 it had begun a new tender offer for its 10 1/8% notes.

The Coral Gables, Fla., operator of supermarkets and video rental stores in Puerto Rico and the U.S. Virgin Islands said it will use up to $31.54 million to buy the notes. As a result, it will not buy back all the outstanding notes.

The amount to be paid depended on the number of notes tendered.

If up to $15 million of notes were submitted, Nutritional Sourcing would have paid $770 per $1,000 principal amount; from more than $15 million to $30 million, the price would have been $780 per $1,000 principal amount; from more than $30 million to $37,595,555.50, the price would have been $790 per $1,000 principal amount and from $37,595,555.51 to $38 million, the price is $830 per $1,000 principal amount.

Holders who tender will be deemed to have consented to an amendment to the note indenture. The change will allow Nutritional Sourcing to end reporting to the Securities and Exchange Commission. Instead it will supply noteholders with financial statements and a management discussion and analysis on a quarterly and annual basis.

The amendment is subject to a majority of notes being tendered and purchased. A majority of the notes outstanding and not owned by an affiliate is $37,595,555.51. There will be no separate consent fee.

Funding for the tender will come from borrowings under the company's senior credit facility with Westernbank of Puerto Rico.

D.F. King Co., Inc. is information agent.

Nutritional Sourcing previously bought $14.301 million of the notes in a Dutch auction tender offer that ended in March. The price was $745 per $1,000 principal amount.

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