CDW prorates purchase of 11%, toggle notes in oversubscribed tender

By Susanna Moon

Chicago, April 14 - CDW Corp. said its subsidiaries CDW LLC and CDW Finance Corp. received tenders for $991,996,859, or about 82.19%, of their $890 million of 11% senior exchange notes due 2015 and $316,974,000 of 11½%/12¼% senior PIK election exchange notes due 2015.

As of 8 a.m. ET on April 12, the expiration date, investors had tendered $774,427,000 of the 11% notes and $217,569,859 of the PIK notes.

The company accepted $519,248,000 of the 11% notes and $145,889,034 of the PIK notes. Under the terms of the offer, the company could purchase up to $665,138,000 principal amount of the notes. Accordingly, the notes will be purchased on a prorated basis.

CDW announced a cap on March 30 for the offer and canceled the consent solicitation for the notes. Before that, the companies were offering to purchase any and all notes tendered.

As previously noted, the companies received enough consents to eliminate substantially all of the restrictive covenants and some events of default in the indenture. A supplemental indenture had been executed but will not become operative.

All holders who tender will receive $1,090 per $1,000 principal amount of notes. Originally, holders who tendered after 5 p.m. ET on March 7, the consent date, would have received $1,060 per $1,000 principal amount of notes.

The issuers will also pay accrued interest up to but excluding the payment date.

The tender offer began on Feb. 23.

The tender offer required the completion of a refinancing transaction yielding enough proceeds to fund it.

CDW Escrow Corp. settled $725 million of 8½% senior notes due 2019 on April 13. The proceeds were deposited into a segregated escrow account and released to CDW LLC and CDW Finance to help fund the tender offer.

It was a condition to the offer that investors tender at least $665,138,000 principal amount of notes as of the tender expiration.

The dealer manager and solicitation agent was J.P. Morgan Securities LLC (800 245-8812 or 212 270-1200). The information agent and tender agent was D.F. King & Co., Inc. (800 290-6429 or 212 269-5550).

CDW is a Vernon Hills, Calif.-based provider of information technology solutions and services.

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