Wolverine Tube further prolongs exchange offer for 10½% senior notes due 2009 to April 20

By Jennifer Chiou

New York, April 15 - Wolverine Tube, Inc. announced one more extension to its offer to issue new notes and cash in exchange for its 10½% senior notes due 2009, this time to 11:59 p.m. ET on April 20.

The exchange offer and consent solicitation had previously been set to expire at 11:59 p.m. ET on April 14, April 7 and 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.

As of April 14, tenders had been received for $66 million, or about 66%, of the notes, and including the $38.3 million of 10½% senior exchange notes that will be exchanged for new notes, holders of $104.3 million, or 76%, of the company's $138 million in principal amount of outstanding notes have agreed to exchange their notes.

As of March 25, tenders had 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 had agreed to exchange their notes.

The company added that it has indications of support from holders of more than 85% of the notes.

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

Offer details

For each $1,000 principal amount of existing notes tendered, the company is offering $1,000 principal amount of new 15% senior secured notes due March 31, 2012 and the cash exchange fee, which is equal to 3%, up from 2%, of the principal amount of new notes issued to the holder.

The new notes were previously to have been 10% senior secured notes due 2011.

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

Interest on the new notes, now increased to 15%, will be made up of 10% payable in cash and 5% payable by issuing additional new notes.

If the outstanding principal amount of new notes at the close of business on March 31, 2010 exceeds $90 million, the interest rate will increase to 16%, of which 10% will be payable in cash and 6% will be payable in kind.

If the outstanding principal amount of new notes at the close of business on March 31, 2011 exceeds $60 million, the interest rate will increase to 17%, of which 10% will be payable in cash and 7% will be payable in kind.

Previously, the cash interest rate would have increased to 12% as of April 1, 2010.

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 company said it will be permitted to enter into a new secured revolving credit facility only with the consent of holders of at least 66 2/3% of the new notes and only if Wolverine Tube redeems an amount of new notes equal to 55% of the eligible Nafta inventory and eligible Nafta accounts receivable.

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 amended exchange offer released today incorporates further comments from noteholders that should be the basis for a successful exchange offer and refinancing of Wolverine's existing maturities," Steven S. Elbaum, chairman of Wolverine Tube, said in a prior news release.

"The company has indications of support from over 75% of the holders of 10½% notes, which matured April 1, 2009, and 100% of the 10½% notes, which matured March 27, 2009."

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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