Alderwoods further extends deadline in tender offer for 7¾% notes

By Laura Lutz

Des Moines, Oct. 26 - Alderwoods Group, Inc. again extended the tender offer and consent solicitation for its $200 million of 7¾% notes due Sept. 15, 2012, this time to 8 a.m. ET on Nov. 2.

The offer, originally set to expire at 11:59 p.m. ET on Oct. 5, had already been extended to Oct. 13, Oct. 19 and Oct. 26.

The company said the extension is to match the closing of its acquisition by Service Corp. International.

For each $1,000 principal amount of notes, Alderwoods is offering $1,080.03, calculated based on the present value of the $1,038.75 redemption price on the first call date of Sept. 15, 2008 plus interest payments through that date, discounted using a spread of 50 basis points over the 3 1/8% U.S. Treasury note due Sept. 15, 2008. Accrued interest up to but not including the payment date will be excluded.

Pricing was set at 2 p.m. ET on Sept. 20. The reference security yield was 4.778% and the tender yield was 5.278%.

The total includes a $20.00 per $1,000 consent payment that will only be paid to those that tendered with consents by the consent deadline on Sept. 20.

Alderwoods will also pay accrued interest up to but excluding the payment date.

The company said it had received tenders for $198.89 million, or 99.45% of the notes as of 8 a.m. on Oct. 19. That was up from the $198.79 million, or 99.4%, of the notes it had received as of Oct. 13.

Holders had tendered $194.19 million, or 97.10%, of the notes by the consent deadline, enough to allow the company to amend the indenture.

In the solicitation, the Cincinnati-based funeral home and cemetery operator is seeking to amend the note indenture to eliminate substantially all of the restrictive covenants as well as certain events of default.

It needed approval from holders of a majority of the notes to make the changes.

The tender offer began on Sept. 7.

The tender is subject to the acquisition of Alderwoods by Service Corp. International, the receipt of sufficient financing to fund the tender and other refinancing transactions by Service Corp. and execution of the supplementary indenture.

J.P. Morgan Securities Inc. is dealer manager and solicitation agent (call collect 212 270-3994). Global Bondholder Services Corp. is the information agent (866 470-3900, banks and brokerages call 212 430-3774).

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