National Waterworks tenders for $200 million 10½% notes

By Jennifer Chiou

New York, July 1 - National Waterworks, Inc. announced a tender offer for any and all of its outstanding $200 million of 10½% series B senior subordinated notes due 2012.

The company is also soliciting consents to eliminate the restrictive covenants in the indenture governing the notes.

The total consideration will be paid in cash and is calculated based on the product of 65% and the value of the 3% U.S. Treasury note due November 15, 2007 plus 50 basis points in addition to the product of 35% and 110.5% of the principal amount of the notes.

The latter is equal to the equity clawback price at which the company can redeem up to 35% of the notes with the proceeds of an equity offering or capital contribution.

Holders who tender by the consent deadline of 5 p.m. ET on July 18, unless extended, will receive the total consideration, which includes a consent payment of $30.00 per $1,000 principal amount.

Investors tendering after the consent deadline but before 5 p.m. ET on Aug. 1 will not receive the consent payment.

Valid tenders are considered consents to the proposed amendments.

Conditions of the offer include the valid receipt of a majority of the notes, the amendment of the company's existing credit facility or the entering of a new credit facility and the initial public offering of stock for parent National Waterworks Holdings, Inc. Part of the net proceeds will be used to fund the tender.

J.P. Morgan Securities Inc. is the dealer manager and solicitation agent (call collect 212 834-3424 or 866 834-4666). Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 387-1500).

Waco, Texas-based National Waterworks distributes pipes, fittings, valves, meters, fire hydrants, service and repair products for water transport.

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