Nortek tenders, seeks consents for $753.33 million 11% notes due 2013

By Susanna Moon

Chicago, April 12 - Nortek, Inc. said it began a cash tender offer and consent solicitation for its outstanding $753,333,333 principal amount of 11% senior secured notes due 2013.

The company will pay $1,052.50 for each $1,000 principal amount of notes tendered by the consent deadline at 5 p.m. ET on April 25, which includes a consent fee of $30.00.

Holders also will receive accrued interest to but not including the settlement date.

The tender offer will end at 12:01 a.m. ET on May 10.

Holders who tender after the consent deadline will receive the total payment less the consent fee.

Tendered notes may be withdrawn by the consent deadline.

The purpose of the tender offer is to acquire all of the outstanding 11% notes, according to a company press release.

Nortek is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants and events of default and to provide for a shorter notice period for voluntary redemptions.

The company said it expects to finance some of the repurchase with borrowings under a new $350 million senior secured term loan facility maturing in 2017. Nortek said it will continue to have access to its current $300 million revolving credit facility due in 2015.

Nortek said it plans to redeem any 11% notes that remain outstanding after the end of the tender offer.

Under the note terms, the company may redeem the 11% notes at 103 plus accrued interest once during any 12-month period, provided that the total amount of the redemptions does not exceed $75 million.

The notes are redeemable at 105 beginning on June 1, at 102.5 on June 1, 2012 and at par on June 1, 2013. Holders also will receive accrued interest.

The company said it plans to redeem any remaining notes at 103 for up to $75 million and at 105 for the remainder.

The tender offer is conditioned on the receipt of at least $500 million of proceeds from a capital markets transaction, entry into the term loan facility, receipt of required consents, execution of an amendment to Nortek's asset-based revolving credit facility permitting the refinancing and the execution of a supplemental indenture amending the notes.

D.F. King & Co., Inc. (800 423-2107 or at call collect 212 269-5550) is the information agent. UBS Securities LLC is the dealer manager and solicitation agent. Questions may be directed to UBS Investment Bank at 888 719-4210 or call collect at 203 719-4210.

The company said on April 11 that it planned to refinance its 11% senior secured notes due 2013 using proceeds from an offering of $500 million principal amount of senior notes due 2021.

Nortek is a Providence, R.I.-based manufacturer of residential and commercial ventilation, HVAC and home technology convenience and security products.

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