Wolverine Tube amends, prolongs exchange offer for 10½% notes

By Jennifer Chiou

New York, March 25 - Wolverine Tube, Inc. announced the extension of its offer to issue new notes and cash in exchange for its 10½% senior notes due 2009 to 11:59 p.m. ET on April 7.

The exchange offer and consent solicitation had been set to expire at 11:59 p.m. ET on March 24. They began on Feb. 25.

The company is soliciting consents to amend the indenture governing the notes to eliminate substantially all of the restrictive covenants, some events of default and some related provisions in order to allow the exchange offer to be completed.

Thus far, tenders have been received for $43.7 million, or about 44%, of the notes, and including the $38.3 million of 10½% senior exchange notes that will be exchanged for new notes, holders of about $82 million, or 59.4%, of the company's $138 million in principal amount of outstanding notes have agreed to exchange their notes.

Wolverine Tube also amended the offer to eliminate the ability of noteholders to receive the cash option.

For each $1,000 principal amount of existing notes tendered, the company is now offering $1,000 principal amount of new 10% senior secured notes due 2011 and the cash exchange fee, which is equal to 3%, up from 2%, of the principal amount of new notes issued to the holder.

Previously, the other option included up to $850 principal amount of new notes, a cash payment of at least $150 and the cash exchange fee.

Among the offer changes, the company amended the terms of the new notes so that they will mature on March 31, 2011 instead of in 2012. In addition, if the outstanding principal amount of new notes at the close of business on March 31, 2010 exceeds $90 million, the cash interest rate will increase to 12% as of April 1, 2010.

Also, if the outstanding principal amount of new notes on March 31, 2011 does not exceed $60 million, the maturity of the new notes automatically will be extended to March 31, 2012 and the cash interest rate will increase to 12% as of April 1, 2011.

Wolverine Tube will also have the option to pay interest on the new notes either in cash or by issuing additional new notes, and with respect to any interest period for which the company elects to pay PIK interest, the interest rate will equal the sum of the cash interest rate plus 4%.

Further, the new notes' terms provide that no liens on assets securing the new notes may be released and no liens on assets securing the notes may be granted to lenders under a new revolving credit facility without the consent of holders of at least 66 2/3% in principal amount of the new notes.

As already reported, the company needs consents from holders of a majority of the notes. Holders who tender will be deemed to have delivered consent.

Wolverine Tube noted that the indenture governing the new notes will include restrictive covenants and events of default similar to the ones currently contained in the existing notes' indenture.

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

The offer is subject to the receipt of tenders for at least 95% of the existing notes.

The company previously said that Plainfield Special Situations Master Fund Ltd., an affiliate of Wolverine Tube and holder of about $9.86 million of the existing notes and $38.3 million of Wolverine Tube's 10½% senior exchange notes due 2009, has agreed to tender all its notes.

"The revised terms of the offer reflect discussions with some of the noteholders, significantly improves certain of its terms and conditions and enhances Wolverine Tube's liquidity and creditworthiness, particularly given poor visibility in the commercial marketplace and uncertainties in the overall economy," David A. Owen, chief financial officer, said in a news release.

"We believe that the enhanced liquidity and flexibility will strengthen the company's competitive position and viability going forward."

The exchange offer and consent solicitation are being made to noteholders who are qualified institutional buyers, non-U.S. persons outside the United States and institutional accredited investors.

D.F. King & Co., Inc. (800 901-0068 or 212 269-5550) is the information agent.

Wolverine Tube is based in Huntsville, Ala., and makes copper and copper alloy tube, fabricated products and metal joining products.

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