Morton's sets pricing in tenders for $68.25 million of its 7½% notes

New York, Jan. 18 - Morton's Restaurant Group, Inc. announced pricing in its cash tender offer for up to $68.25 million of its 7½% senior secured notes due 2010.

For each $1,000 principal amount at maturity, the company will pay $1,011.10, including the consent payment of $15.00 per $1,000.

Holders who tender after the consent deadline of 5 p.m. ET on Jan. 18 will receive $996.10 per $1,000 principal amount.

Morton's also said it received the necessary consents to amend the notes.

Morton's announced the tender on Jan. 4 and the New Hyde Park, N.Y., company said it was also soliciting consents to, among other things, eliminate substantially all of the restrictive covenants and certain events of default in the note indenture.

For each $1,000 principal amount at maturity of notes accepted for payment, Morton's is paying the sum of the present value on the expected payment date of $971.06 and the interest that would accrue from Jan. 1, the most recent interest payment date, to July 1, 2007. From that total will be subtracted accrued interest from Jan. 1 up to but excluding the expected payment date.

The present value was determined using the yield to maturity of the 3 5/8% U.S. Treasury note due June 30, 2007 plus a fixed spread of 27 basis points.

The total includes a consent payment of $15.00 per $1,000 principal amount at maturity.

Morton's will also pay accrued interest up to but excluding the expected payment date.

The tender ends at 5 p.m. ET on Feb. 1.

If the offer is oversubscribed, notes will be accepted pro rata.

Pricing was fixed at 10 a.m. ET on Jan. 18.

Holders cannot be tendered without consents and consents cannot be delivered without tendering.

The offer is subject to conditions including completion of Morton's planned initial public offering, closing of its proposed new senior revolving credit facility and the receipt of consents from holders of at least a majority of the notes.

The $68.25 million is 65% of the principal amount at maturity of the notes. Morton's said that if it completes the tender offer it then plans to redeem any notes not tendered up to 35% of the total principal amount at maturity.

Jefferies & Co., Inc. is dealer manager and solicitation agent (973 912-2888). CapitalBridge is the information agent (201 499-3500 or 877 746-3583).

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