Stratus Technologies sets pricing in tender for 10 3/8% notes

By Jennifer Chiou

New York, March 17 - Stratus Technologies, Inc. said it set pricing in its cash tender offer for its $144.885 million of 10 3/8% senior notes due 2007.

Assuming a March 28 payment date, for each $1,000 principal amount of notes, Stratus said it will pay $1,083.12, including a $30.00 per $1,000 consent payment that will only be paid to holders who tender with consents by the consent deadline.

The payout is based on a fixed spread of 50 basis points over the yield of the 2 7/8% U.S. Treasury note due Nov. 30, 2006.

Pricing was set at 2 p.m. ET on March 17. The tender offer yield was 5.304%.

Accrued interest up to but excluding the payment date will also be paid.

The consent deadline is 5 p.m. ET on March 21 and the offer expires at 5 p.m. ET on April 5.

The Maynard, Mass., supplier of high availability servers is also soliciting consents to amend the note indenture to eliminate substantially all the restrictive covenants and certain events of default and to amend other provisions.

Stratus also said it changed the first payment date to promptly following the acceptance of the notes for purchase, expected to be March 28. The date was changed from the first business day after the consent date.

The offer is subject to conditions including the receipt of consents for a majority of the notes and Stratus raising sufficient funds from new debt to pay for the tender.

The company began the offer on March 8.

Goldman, Sachs & Co. is dealer manager (contact Credit Liability Management Group at 800 828-3182 or call collect 212 357-7867). D.F. King & Co., Inc. is the information agent and tender agent (800 290-6426 or call collect 212 269-5550).

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