Steinway accepts tenders for 68.94% of 8¾% notes, calls remainder

By Jennifer Chiou

New York, March 9 - Steinway Musical Instruments, Inc. said it accepted and funded tenders on Feb. 23 for $114.354 million or 68.81% of its $166.2 million of 8¾% senior notes due 2011.

Steinway added it plans to redeem the remaining $51.615 million of notes on April 17 at a redemption price of 104.375% of the principal amount, plus unpaid interest accrued to the redemption date.

Between the consent deadline of 5 p.m. ET on Feb. 22 and expiration of the offer at 9 a.m. ET on March 9, the company said it accepted an additional $225,000 of the notes, which it expects to settle on March 9. The additional amount raises the tendered amount to 68.94% of the notes.

On Feb. 23, Steinway said it received the necessary consents to amend the note indenture.

Steinway announced on Feb. 8 it was tendering for the notes, and the Waltham, Mass., musical instrument manufacturer said it was also soliciting consents to amend the notes' indenture to eliminate all of the restrictive covenants and events of default.

For each $1,000 principal amount of notes, investors will receive $1,047.85, which includes a consent payment of $4.00 for those who tendered by the consent deadline.

The tender was conditioned upon consent from holders of a majority of the notes and sufficient financing.

Steinway said it intends to use the proceeds of a sale of $175 million of new senior notes to fund the tender.

UBS Securities LLC is dealer manager (888 722-9555 x4210). D.F. King & Co. is the information agent (call collect 212 269-5550 or 800 628-8536).

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