Buffets Holdings sets pricing in tender for 13 7/8% notes

By Jennifer Chiou

New York, Oct. 20 - Buffets Holdings Inc. announced pricing its tender offer and consent solicitation for its $132 million principal amount at maturity of 13 7/8% senior discount notes due 2010.

Assuming an early settlement date of Nov. 1, the total consideration for each $1,000 principal amount at maturity of notes will be $901.81, which includes a consent payment of $30.00 for those who tendered by the early deadline.

The tender offer yield is 5.395% and it was determined as of 10 a.m. ET on Oct. 20.

For each $1,000 principal amount of the 13 7/8% notes, Buffets Holdings based the payout on the sum of the accreted value of the $1,000 principal amount at maturity on the applicable payment date and 50% of a make-whole premium determined using the yield of a the 4.895% Treasury due July 31, 2008, the first redemption date for the notes, plus 50 basis points and an additional premium amount.

Following an Oct. 16 amendment, the additional premium amount was set equal to 1.377181 multiplied by the difference between the accreted value of the note on the applicable payment date and its accreted value on Dec. 29, 2005.

Buffets had not originally disclosed the size of the additional premium, saying that it was described in the tender offer documents.

On Oct. 19, the company said it received the required consents after holders of 81% of the notes submitted tenders before the early tender deadline at 9 a.m. ET on Oct. 19.

The consents allow the company to amend the note indentures to eliminate substantially all of the restrictive covenants and certain events of default.

The tender offer will continue until 9 a.m. ET on Nov. 3.

When the tender offer was announced on Sept. 15, Buffets said that holders of more than 80% of the 13 7/8% notes had already agreed to tender their notes by Oct 16.

On Oct. 16, the early tender deadline and tender expiration had been extended from Oct. 16 and Oct. 31, respectively.

The offer was announced alongside a tender offer for the 11¼% senior subordinated notes due 2010 of Buffets, Inc.

Buffets announced on Oct. 17 that it had received tenders and consents from holders of 97% of the 11¼% notes by the early tender deadline on Oct. 16.

Those consents also allow Buffets to amend the note indentures to eliminate substantially all of the restrictive covenants and certain events of default.

For the 11¼% notes, Buffest will pay $1,058.75 per $1,000 principal amount plus accrued interest up to but excluding the payment date.

The payout for the 11¼% notes includes a $30.00 per $1,000 principal amount consent payment that will only be paid to holders who tendered with consents by the early tender date.

The 11¼% tender offer ends at 9 a.m. ET on Oct. 31.

Holders who tender are required to deliver consents in both offers.

The tenders are subject to conditions including the receipt of consents from holders of a majority of each series of notes and Buffets obtaining the financing needed to pay for the notes.

Credit Suisse Securities (USA) LLC is dealer manager for both offers (800 820-1653 or collect 212 538-0652). Morrow & Co., Inc. is the information agent (800 607-0088).

Buffets is an Eagan, Minn., restaurant operator.

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