GFSI receives needed tenders in exchange for 9 5/8% notes

New York, Dec. 28 - GFSI, Inc. said it has achieved the necessary response to its consent solicitation and exchange offer for its $134.9 million of 9 5/8% senior subordinated notes due 2007.

Holders of $123.4 million of the notes have now tendered their securities.

Initial settlement was scheduled for Dec. 30.

At its previous announcement on Dec. 21, GFSI increased the consent payment to $20.00 from $10.00 per $1,000 principal amount.

In addition, the consent deadline was extended to the later of 5 p.m. ET on Dec. 27 or the day on which the company receives consents from holders of at least 90% of notes and a supplemental indenture is executed. The consent deadline had been 5 p.m. ET on Dec. 20.

Previously, the exchange and consent solicitation were conditioned upon tenders from holders of 95% of the notes.

The company is offering to issue new notes with a higher coupon, seniority in the capital structure and longer maturity for the 9 5/8% notes.

The Lenexa, Kan., sportswear manufacturer is offering the new 11% senior secured notes due 2011 on a one-for-one basis for the existing debt.

GFSI was soliciting consents to amend the indenture for the 9 5/8% notes to eliminate substantially all of the restrictive covenants and certain events of default and related provisions in such indentures.

The company said it needs the consent of its bank lenders and that the offer is subject to parent company GFSI Holdings, Inc. completing refinancing transactions.

GFSI, which announced the offer on Dec. 8, will pay accrued interest on the existing notes in cash.

Only noteholders who are qualified institutional buyers and accredited investors may participate in the exchange.

The offer ends at 5 p.m. ET on Jan. 5.

U.S. Bank NA is the exchange agent (800 934-6802). MacKenzie Partners, Inc. is the information agent (212 929-5500).

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