Gregg modifies tender condition in offer for 9% notes

By Jennifer Chiou

New York, July 20 - Gregg Appliances, Inc. said it altered part of the financing condition in the tender offer and consent solicitation for all of its $111.205 million of outstanding 9% senior notes due 2013.

The company lowered the amount of proceeds required from the initial public offering of hhgregg, Inc. to at least $48.75 million from $50 million.

The offer is linked to the IPO of hhgregg's common stock. After hhgregg's registration statement becomes effective, hhgregg will become Gregg's parent company in a corporate reorganization.

The tender offer is also conditioned upon the closing of debt refinancing of Gregg, in which it will restate its existing $75 million revolving credit facility to increase the facility amount to $100 million and enter a new $100 million term loan B.

Noteholders had tendered and submitted consents for $104.272 million, or 93.8%, of the notes as of 5 p.m. ET on July 10, the consent deadline. Gregg had received the needed tenders and consents from holders of a majority of the notes.

The company will pay $1,092.19 for each $1,000 principal amount of notes tendered plus accrued interest up to but excluding the settlement date, which is expected to be July 25.

The payout includes a $30.00 consent payment for notes tendered by the consent deadline.

The total consideration was determined at 2 p.m. ET on July 10 based on a fixed spread of 50 basis points over the bid-side yield to maturity of the 4 7/8% U.S. Treasury note due Jan. 31, 2009.

The tender offer will expire at midnight ET on July 24.

Wachovia Securities (866 309-6316 or collect 704 715-8341) is the dealer manager and solicitation agent for the tender offer and consent solicitation. Global Bondholder Services Corp. (866 470-4500 or collect 212 430-3774) is the information agent and tender agent.

Indianapolis-based Gregg sells consumer electronics, home appliances, mattresses and related services, operating under the hhgregg and Fine Lines brands.

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