Liz Claiborne records tenders for €128.5 million 5% notes, extends offer; holders reject amendment

By Jennifer Chiou

New York, April 6 - Liz Claiborne, Inc. announced the receipt of tenders from holders of €128.5 million of its €350 million of 5% notes due 2013 as of the original offer deadline of 12:01 a.m. ET on April 5.

The company said that it is extending the offer to purchase up to €155 million of the notes to April 8 to allow for the conditions of the offer to be satisfied. Among the conditions, financing from an issue of new senior secured notes is expected to settle on April 7.

Noteholders did not approve the company's proposal 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 at the March 30 meeting.

Previously, the offer was conditioned on noteholder approval, but that requirement was waived.

At the consent deadline on March 22, holders had tendered €117.89 million of the notes.

Liz Claiborne previously stated that the resolution would have permitted changing the note terms to allow incurring new secured debt so that the company could repurchase the notes in the offer even if the measure was not passed by noteholders.

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

As previously noted, holders who tendered by the early tender date will receive €960 for each €1,000 principal amount, including an early tender and consent fee of 2% of par.

Those who tender after the early date will receive the total payment less the early tender fee.

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

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

Liz Claiborne previously 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.

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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