Friendfinder plans to call $400 million of notes using IPO proceeds

By Angela McDaniels

Tacoma, Wash., Dec. 23 - Friendfinder Networks Inc. plans to use the proceeds from its upcoming $460 million initial public offering of stock to redeem nearly $400 million of notes, according to an S-1 filing with the Securities and Exchange Commission.

Specifically, the company plans to call the following notes in the following priority:

• $242.1 million of subsidiary Interactive Network, Inc.'s $257.3 million senior secured notes due 2011 at 115 and the remainder at 105;

• Interactive Network, Inc.'s $80.0 million 15% subordinated secured notes due 2011 at par;

• Friendfinder's $6.2 million outstanding 15% senior secured notes due 2010 at 101.5;

• Friendfinder's $38.4 million outstanding 15% senior secured notes due 2010 at 101.5; and

• Friendfinder's $32.2 million outstanding 13% subordinated term loan notes due 2011 at par.

In each case, noteholders will also received accrued interest.

Any remaining proceeds will be used for working capital and general corporate purposes.

The company said it is required under the terms of Interactive Network's senior secured notes to use at least 50% of the net proceeds from the IPO to redeem these notes. In addition, the term loan notes cannot be redeemed prior to the redemption or conversion of the company's subordinated convertible notes.

Friendfinder is an internet-based social networking and multimedia entertainment company based in Boca Raton, Fla.

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