Liz Claiborne tenders for some 5% notes, seeks OK to allow new issue

By Susanna Moon

Chicago, March 8 - Liz Claiborne, Inc. said it began a cash tender offer to purchase up to €155 million principal amount of its €350 million 5% notes due 2013.

The company said it is also asking holders of the notes to consider an extraordinary resolution to amend the notes to allow issuing new secured debt with proceeds to be used to redeem, repurchase, prepay, defease, refund or refinance the notes.

Holders will receive a total payment of 96 for notes tendered by 12:01 a.m. ET on March 22. The total payment includes an early tender and consent fee of 2% of par.

Those who tender after the early date but by the offer expiration at 12:01 a.m. ET on April 5 will receive the total payment less the early tender fee.

The company also will pay accrued interest up to but excluding the settlement date of April 7.

If the amount of notes tendered exceeds the offer cap, the company will accept notes for payment on a pro rata basis.

Liz Claiborne said the purpose of the offer is to manage its liability profile and upcoming maturities by refinancing some outstanding notes with proceeds from new senior secured notes in order to maintain the company's financial flexibility.

The offer is conditioned on the company securing new financing to fund the offer.

Merrill Lynch International (+44 20 7995 3715) and J.P. Morgan Securities Ltd. (+ 44 20 7325 9633) are the dealer managers for the offer, and Deutsche Bank AG, London Branch (+44 20 7547 5000) is the tender agent.

Liz Claiborne is a New York-based designer and marketer of apparel and accessories.

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