Omnova extends tender for 11¼% notes

By Jennifer Chiou

New York, May 18 - Omnova Solutions Inc. said it prolonged the tender offer for its $165 million of 11¼% senior secured notes due 2010 to 8 a.m. ET on May 22 from May 18.

The offer is being extended to coordinate the closing with the completion of a new $150 million term loan and the amendment of the company's existing senior secured credit facility.

The company previously said it executed the supplemental indenture following the receipt of the required consents to amend the indenture to eliminate substantially all of the restrictive covenants. The supplemental indenture will become operative after the tender offer expires.

The consent solicitation and tender offer began on April 20. The consent deadline was May 3.

As of 5 p.m. ET on May 17, holders had tendered $162 million, or 98.182%, of the notes, unchanged from the consent deadline.

For each $1,000 principal amount of notes tendered, Omnova will pay $1,058.10, which includes a consent fee of $30.00 for notes tendered by the consent deadline.

Tendering noteholders will also receive accrued interest up to but excluding the payment date.

The tender consideration was determined on May 4 and equals the present value of $1,056.25, the redemption price for the notes on June 1, 2007, which is the earliest redemption date, plus interest payments through June 1, discounted using the 3½% Treasury due May 31, 2007 plus a fixed spread of 50 basis points, less accrued interest up to but excluding the payment date.

The company plans to pay the tender consideration before June 1. If the payment date occurs on or after June 1, Omnova said it will pay $1,060.94, which represents the redemption price on June 1, plus the equivalent of two weeks of interest.

Deutsche Bank Securities Inc. (call collect 212 250-5655) is the dealer manager. The information agent is MacKenzie Partners, Inc. (800 322-2885).

The Fairlawn, Ohio, specialty chemical company announced plans for the redemption on March 20.

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