American Greetings buys $277.3 million 6.1% notes in tender

New York, May 24 - American Greetings Corp. said it completed its tender offer for its $300 million of 6.1% notes due 2029, buying $277.3 million or 92.4% of the securities.

The offer ended at 5 p.m. ET on May 24.

For each $1,000 principal amount, the company will pay $1,013.61, which includes a $15.00 consent payment that will only be paid to those who tendered by the consent deadline.

The company launched the tender offer and consent solicitation for the notes on April 6. The consent solicitation expired on April 19, at which time American Greetings said it received the necessary consents to amend the notes.

American Greetings said the tender offer is part of its capital restructuring plan, which it is undertaking in an effort to increase its financial flexibility.

The consideration paid to noteholders who tender was based on the present value of the notes' $1,000 value on their put date of Aug. 1, 2008 plus interest accrued to that date, discounted using 50 basis points over the bid-side yield of the 3.25% U.S. Treasury note due Aug. 15, 2008, minus accrued interest up to May 25, the payment date.

Pricing was set at 2 p.m. ET on May 22.

Noteholders who tender will also receive interest accrued up to but excluding the payment date, and noteholders who consented by the consent deadline will receive a consent payment of $15.00 per $1,000 principal amount of notes.

The offer is subject to the tender of at least two-thirds of the notes, the execution of a supplemental indenture amending the note indenture, receipt of the consent of the notes' global agent and other customary conditions.

The Cleveland-based greeting card company said it plans to fund the tender offer with proceeds from the sale of $200 million of new 10-year senior notes.

UBS Securities LLC (888 722-9555 ext. 4210 or 203 719-4210) is dealer manager and solicitation agent, and Global Bondholder Services Corp. (866 795-2200 or 212 430-3774) is the information agent.

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