ResCap completes tender for up to $750 million of notes

By Jennifer Chiou

New York, Dec. 20 - Residential Capital, LLC (ResCap) said it wrapped its cash tender offer for up to $750 million of four series of notes.

The offer ended at midnight ET on Dec. 19, extended previously from 5 p.m. ET on Dec. 12.

The early deadline, which originally was Dec. 5, coincided with the expiration of the offer. The offer began on Nov. 21.

Affected notes, in order of acceptance priority level, included ResCap's $1.25 billion of floating-rate notes due June 9, 2008, $500 million of floating-rate notes due Nov. 21, 2008, $750 million of 6 1/8% notes due Nov. 21, 2008 and $1 billion of subordinated floating-rate notes due April 17, 2009.

The company said it accepted all tendered securities. Details were not disclosed.

For each $1,000 principal amount, the company paid $830 for the floaters due June 9, 2008, $760 for the floaters due Nov. 21, 2008, $760 for the 6 1/8% notes and $500 for the floaters due 2009.

The payouts included a $30.00 early tender premium for all those who tendered.

ResCap said it also paid accrued interest to the settlement date.

The company previously noted that it may increase the maximum tender amount.

As already reported, several of ResCap's credit facilities contain a financial covenant requiring it to maintain a minimum consolidated tangible net worth as of the end of each fiscal quarter.

As of Sept. 30, the most restrictive provision requires ResCap to maintain a minimum consolidated tangible net worth of $5.4 billion. ResCap's reported consolidated tangible net worth as of Sept. 30 was $6.2 billion.

The company said that the purchase of the notes in the offer at a discount and the retirement of the notes will increase its income in the fourth quarter of 2007 and its consolidated tangible net worth as of the end of the year, above the levels that would have occurred in the absence of acquiring notes in the offer.

Banc of America Securities LLC (866 475-9886 or call collect 704 386-3244) and Citi (800 558-3745 or call collect 212 723-6106) were the dealer managers. Global Bondholder Services Corp. (866 294-2200) was the information agent and depositary. Deutsche Bank Luxembourg SA was the Luxembourg tender agent.

Based in Minneapolis, ResCap is a real estate finance company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.