Taylor Wimpey seeks consents to extend maturity on 6 5/8%, 6 3/8% bonds

By Susanna Moon

Chicago, April 8 - Taylor Wimpey plc began a consent solicitation to amend its £250 million 6 5/8% guaranteed bonds due 2012 and £200 million 6 3/8% bonds due 2019.

The company said it will pay an early response fee of £10 for every £1,000 principal amount of bonds tendered by 11 a.m. ET on April 24.

The bondholders meeting for the 6 5/8% bonds will be held on April 28, and the bondholders meeting for the 6 3/8% bonds will be held on April 30.

Taylor Wimpey seeks to amend the following:

• Extend the maturity date of the 6 5/8% bonds to July 3, 2012 from Feb. 7, 2012, including an extension fee of 20 basis points of the principal amount;

• Raise the interest rate on both bonds by 455 bps per year, initially subject to adjustment depending on certain performance criteria;

• Add another pay-in-kind margin payable at an initial rate of 150 bps per year, subject to adjustment depending on certain performance criteria;

• Revise package of financial and other covenants; and

• Amend provisions relating to redemption, including the addition of an ability for bondholders to require the company to redeem the 6 3/8% bonds on July 3, and, in certain circumstances, to redeem both bonds on Feb. 7, 2012.

The proposal requires support of at least 75% of investors at each of the bondholders meetings.

These amendments will align the terms of the bonds with arrangements to be put in place with the other principal creditors of the Taylor Wimpey group, according to a press release.

Bondholders and certain other creditors will be issued warrants for up to 57,914,900 shares, or 5% of the company's issued share capital.

The company previously said that special committees with members holding 78% of the 2012 eurobonds and 76% of the 2019 eurobonds have indicated their approval of the amendments.

HSBC Bank plc (44 0 20 7991 5874, attn: liability management group, or email liability.management@hsbcib.com) is consent solicitation agent. Lucid Issuer Services Ltd. is tabulation agent.

On April 7, Taylor Wimpey plc said the amendment of its debt facilities has been approved by its banking syndicate and U.S. private placement noteholders and is now awaiting formal approval from holders of the group's eurobonds due 2012 and eurobonds due 2019.

As previously reported, the company said in December that it expected to miss its interest coverage covenants in January and that it was negotiating a deferral agreement with its lenders.

Assuming the amendments are approved at the meetings, they will become effective April 30.

"Following complex negotiations, this financing package ... gives the group flexibility to enable it to trade through the current downturn. Although we remain cautious about market conditions, current trading and the cash generation of the business are both encouraging," chief executive officer Pet Redfern said in a company news release.

Taylor Wimpey is a London-based homebuilding company.

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