Tommy Hilfiger U.S.A. tenders for 6.85% notes due 2008, 9% bonds due 2031

By Angela McDaniels

Seattle, April 7 - Tommy Hilfiger U.S.A. Inc. has begun tender offers for its $192.47 million 6.85% notes due 2008 and $150 million 9% senior bonds due 2031 and a consent solicitation to amend the indentures governing the notes, according to a company news release.

The proposed amendment would eliminate the restrictive covenants, including those relating to limitations on the company's liens and debt, and certain related events of default.

The consent solicitations will expire at 5 p.m. ET on April 20, and the tender offers will expire at 5 p.m. ET on May 5, unless either the consent solicitations of tender offers are terminated or extended.

The company will pay $25.25 per $25 principal amount of 9% bonds tendered.

The payment for the 6.85% notes will equal the sum of the present value of scheduled payments until June 1, 2008, the maturity date, discounted using the yield to maturity of the 3.25% U.S. Treasury Note due Aug.15, 2008 and 50 basis points.

Pricing will be determined at 2 p.m. ET on April 21.

Noteholders and bondholders will also receive accrued interest up to but excluding the settlement date.

The payouts include a consent payment of $0.25 for the 9% bonds and $20 for the 6.85% notes for those who tender before the consent deadline on April 20.

Citigroup Corporate and Investment Banking (212 723-6106 or 800-558-3745) is dealer manager and Global Bondholder Services Corp. is information agent (212 430-3774 or 866-389-1500).

The tender offers and the consent solicitations are being conducted in connection with parent company Tommy Hilfiger Corp.'s agreement to merge with Apax Partners.

The company said it has scheduled a special meeting of shareholders for May 9 to vote on and approve the merger.

Apax has irrevocably waived the closing condition that the debt tender offers be consummated and consents obtained from a majority of holders before the merger provided that if such consents are not obtained for the 9% bonds, Tommy Hilfiger U.S.A. will effect a covenant defeasance of the 9% bonds.

The tender offers are conditioned upon receipt of the applicable debt financing and execution and delivery of the supplemental indenture for the 9% bonds or prior to or concurrently with the closing of the merger.

New York-based Tommy Hilfiger U.S.A. is a wholly owned subsidiary of Tommy Hilfiger Corp., a Hong-Kong based clothing company.

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