Brand Services extends tender offers for 12%, 13% notes

By Jennifer Chiou

New York, Feb. 1 - Brand Services, Inc. extended its tender offer for its $150 million of 12% senior subordinated notes due 2012 and Brand Energy & Infrastructure Services, Inc. also prolonged its cash tender offer for its 13% senior subordinated pay-in-kind notes due 2013.

The tender offers now expire at 5 p.m. ET on Feb. 6 instead of Feb. 1.

Brand Services will pay $1,100.65 for each $1,000 principal amount of 12% notes.

That price is based on the present value of cash flows to the first call date of Oct. 15, 2007, when the notes are callable at $1,060 per $1,000 principal amount, discounted using a rate of 50 basis points - reduced from 62.5 bps - over the yield of the 4% U.S. Treasury note due Sept. 30, 2007 calculated on the pricing date. The reference yield was 5.15%.

The total includes a consent payment of $30.00 per $1,000 principal amount for notes tendered by May 22, 2006, the consent deadline.

Brand Services will also pay accrued interest up to but excluding the payment date.

Originally set for June 7, 2006, the deadline was previously extended to June 28, 2006, July 13, July 21, Aug. 1, Sept. 15, Sept. 22, Nov. 9, Nov. 20, Dec. 5, Dec. 12, Dec. 27, Jan. 9 and Jan. 22.

The pricing date was also moved to 10 a.m. ET on Jan. 18 from Jan. 5. Previously, pricing was set for June 7, 2006, June 28, 2006, July 18, Aug. 31, Sept. 8, Oct. 26, Nov. 20, Nov. 28, Dec. 12 and Dec. 22.

Also on Jan. 4, the company ended the condition that it complete an initial public offering because of parent company Brand Holdings, LLC's announced stock purchase agreement, under which FR Brand Acquisition Corp., an entity majority-owned by funds sponsored by First Reserve Corp., will acquire all of Brand Holdings' stock.

The offer will now be conditioned on the completion of the acquisition.

The company had received tenders for 98.67% of the notes as of Jan. 31, unchanged from May 22.

Brand Services announced the tender offer and consent solicitation on May 9. On May 16, it tightened the spread in the payout.

The concurrent consent solicitation allowed the company to amend the note indenture to eliminate nearly all of the restrictive covenants and certain events of default.

13% notes tender details

Brand Energy previously announced it will pay $1,112.24 for each $1,000 principal amount of 13% notes that were tendered before the consent deadline at 5 p.m. ET on Jan. 17.

The price was determined at 10 a.m. ET on Jan. 18 based on the present value of cash flows to the first call date of Oct. 15, 2007, when the notes are callable at $1,065, discounted at a rate equal to 50 bps over the yield to maturity on the 4% Treasury due Sept. 30, 2007. The reference yield was 5.15%.

Notes tendered after the consent deadline will receive the same amount, less a $30.00 consent payment for each $1,000 principal amount of notes.

As of the consent deadline, the company had received tenders and consents for 99.99% of the 13% notes, unchanged from Jan. 31.

The consents allow the company to, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture.

Holders who tender must deliver consents.

The offer is conditioned on, among other things, the completed acquisition and the receipt of consents from a majority of noteholders.

Credit Suisse Securities (USA) LLC is dealer manager and solicitation agent (800 820-1653 or call collect 212 538-0652). D.F. King & Co., Inc. is the information agent (800 949-2583).

Brand Services is a Kennesaw, Ga., provider of scaffolding services.

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