Eddie Bauer gets consents needed to amend 5.25% convertibles

By Angela McDaniels

Tacoma, Wash., Sept. 25 - Eddie Bauer Holdings, Inc. amended the indenture governing its 5.25% convertible senior notes due 2014 on Sept. 19 after receiving consents from holders of 91% of the convertibles, according to an 8-K filing with the Securities and Exchange Commission.

Holders who consented will receive a $2.50 fee for each $1,000 principal amount of convertibles.

The company began the consent solicitation on Sept. 5 in order to shore up its ability to offset income with net operating loss carryovers.

The consents will allow Eddie Bauer to extend the current limitation on ownership of its common stock and other equity securities to Jan. 1, 2012 from Jan. 4, 2009, with the provision that the limitation will not apply to conversion of the notes.

The ownership limitation states that no person may acquire 4.75% or more of the company's stock or equity securities and that anyone owning 4.75% or more can only acquire additional stock after receiving company approval.

The limitation was put into place because the company's ability to use the net operating loss carryovers from before its bankruptcy emergence would be materially limited if a change in ownership occurred, according to a previous 8-K filing.

The extension of the ownership limitation still requires approval from holders of a majority of the company's common stock. Shareholders will vote on the matter at a special meeting on Nov. 21.

MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) was the information and tabulation agent for the consent solicitation.

Eddie Bauer is a Bellevue, Wash.-based specialty retailer that sells casual sportswear and accessories.

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