Land O'Lakes receives $3.766 million of tenders in sale proceeds offer for 8¾%, 9% notes

By Jennifer Chiou

New York, Sept. 21 - Land O'Lakes, Inc. said holders submitted $3.766 million of notes in its required par offer for its 8¾% senior notes due 2011 and 9% senior secured notes due 2010 related to the sale of its interest in CF Industries, Inc., according to an 8-K filing with the Securities and Exchange Commission.

The company received tenders for $3.766 million of its $350 million of 8¾% notes and none of its $175 million of 9% notes in the offer.

The notes' indentures, which required the company to start an offer for up to the amount of net proceeds from the sale - about $315 million - place limits on Land O'Lakes' ability to sell assets and governs use of the proceeds it receives.

The offer ended on Sept. 15.

U.S. Bank, NA, the trustee under notes' indentures, returned the remaining amount of the net proceeds to the company upon expiration of the par offer.

Land O'Lakes used the remaining proceeds to pay down the amounts drawn on its accounts receivable securitization facility and to increase its cash balances.

On Aug. 17, Land O'Lakes announced that it sold its entire interest in CF Industries.

Under the indentures, the company may repay its bank indebtedness, make investments in additional assets, make a par offer for the notes and allocate proceeds for any general corporate purpose.

Because the company did not opt to use proceeds for its bank debt or for investments in additional assets, the company had to make the par offer for its notes.

The Arden Hills, Minn., company is a farmer-owned food and agricultural cooperative.

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