American Media again extends tender for 10¼% notes, 8 7/8% notes

By Jennifer Chiou

New York, Oct. 1 - American Media Operations, Inc. said it once more prolonged its tender offer and consent solicitation for about $570 million of its senior subordinated notes consisting of $400 million of its 10¼% series B senior subordinated notes due 2009 (Cusip 02744RAH0) and $14,544,000 of its 10¼% series B senior subordinated notes due 2009 (Cusip 02744RAM9) as well as $150 million of its 8 7/8% senior subordinated notes due 2011 (Cusip 02744RAK3) and $5,454,000 of its 8 7/8% senior subordinated notes due 2011 (Cusip 02744RAP2).

The offer now ends at 5 p.m. ET on Oct. 28, extended from Sept. 30 and before that Sept. 25.

Prior to launching the offer, the company said it entered into agreements with holders of 32.6% of the outstanding 2009 notes and 50.8% of the outstanding 2011 notes under which the holders have agreed to tender their notes. The company added that those agreements have expired.

Under a previous amendment, American Media is now permitted to waive the supplemental tender condition for either of the offers. The change means it can complete the tender without receiving the necessary consents. Should that occur, the notes will not be amended, but holders will still receive the full payment.

The tender is split into two: one for the 10¼% notes and one for the 8 7/8% notes. The waiver could apply to either or both.

In addition, American Media has amended the terms of the convertible notes on offer to include holders of record as of Oct. 27 and to allow up to $18 million of additional notes to be issued.

As announced on Aug. 27, American Media is tendering for the notes and soliciting consents to the note indentures to eliminate substantially all of the restrictive covenants, certain events of default and other related provisions.

Concurrently with the offer, the company is offering to noteholders:

• 250,000 mandatorily convertible units comprised of $250 million of 12% senior notes due 2013 and $15.91 million principal amount at maturity of special senior subordinated discount notes due 2013; and

• Up to $340,364,800 principal amount at maturity of 10¼% mandatorily convertible senior subordinated discount notes due 2013.

American Media, Inc. is also offering up to 320,000 warrants to purchase a like number of shares of its class A common stock, representing up to 20% of its currently outstanding shares of common stock.

For each $1,000 in accreted value of 10¼% mandatorily convertible senior subordinated discount notes, American Media said it will issue one warrant to the purchaser. Under the terms of the convertible securities, when more than $373,089,600, or 90%, of the 2009 notes and in excess of $77,727,000, or 50%, of the 2011 notes are prepaid, redeemed or acquired by the company, each unit will automatically convert into $1,063.64 principal amount at maturity of American Media Operations' new 11½% senior subordinated discount notes due 2013, and each $1.00 principal amount at maturity of convertible senior subordinated discount notes then outstanding will automatically convert into $1.00 principal amount at maturity of the new 11½% discount notes.

The company said it will pay par plus accrued interest in the offer, including a $10.00 per $1,000 principal amount consent payment. To receive the consent payment, the holder must concurrently purchase a specified amount of the securities that are being offered.

The offer is subject to a minimum tender condition of 66.7% for the 2009 notes and 50.1% for the 2011 notes.

The company previously said that its revolving credit facility matures in January 2012 and its term facility matures in January 2013, but both will mature on Feb. 1, 2009 if it does not refinance at least $389.5 million of its 10¼% notes on or before Feb. 1, 2009.

In addition, the revolving facility and the term facility both will mature on Oct. 15, 2010 if American Media does not refinance at least $145.5 million of its 8 7/8% notes on or prior to Oct. 15, 2010, the filing stated.

J.P. Morgan Securities Inc. is the dealer manager and solicitation agent (call collect 212 357-0775). MacKenzie Partners, Inc. is the information agent and tabulation agent (800 322-2885 or call collect 212 929-5500).

American Media is a Boca Raton, Fla., magazine publisher.

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