Warner Music units launch tender offers for 7 3/8%, 8 1/8%, 9½% notes

By Marisa Wong

Madison, Wis., June 27 - WMG Acquisition Corp. and WMG Holdings Corp., both wholly owned subsidiaries of Warner Music Group Corp., announced that they began cash tender offers to purchase any and all of their respective outstanding debt securities. The securities include the $465 million of 7 3/8% senior subordinated notes due 2014 and £100 million of 8 1/8% senior subordinated notes due 2014 issued by WMG Acquisition and the $257,927,000 of 9½% senior discount notes due 2014 issued by WMG Holdings.

WMG Acquisition and WMG Holdings are also soliciting consents to amend each of the indentures governing the notes to eliminate substantially all of the restrictive covenants, certain events of default and other related provisions.

Each tender offer will expire at 12 a.m. ET on July 26.

Holders must tender their notes and deliver their consents by 5 p.m. ET. on July 11 to receive the applicable total consideration, which includes a consent payment. Holders who tender their notes after the consent time will receive only the applicable purchase price, which is equal to the total consideration less the consent payment.

The total consideration for each $1,000 principal amount of 7 3/8% notes is $1,015.29, which includes a $15.00 consent payment.

The total consideration for each £1,000 of 8 1/8% notes is £1,016.84, which includes a £15.00 consent payment, and the total consideration per $1,000 of 9½% notes is $1,035.42, also with a $15.00 consent payment. The purchase price is $1,000.29 for the 7 3/8% notes, £1,001.84 for the 8 1/8% notes and $1,020.42 for the 9½% notes.

WMG Acquisition and WMG Holdings said that they will also pay accrued interest up to but excluding the applicable payment date.

The tender offers are being made in connection with the May 6 agreement and plan of merger with Airplanes Music LLC, an affiliate of Access Industries, Inc., Airplanes Merger Sub, Inc. and Warner Music Group, under which Airplanes Merger Sub will be merged with and into Warner Music.

Payment for notes accepted for purchase will be made shortly after completion of the acquisition for notes tendered by the consent time and promptly after the expiration date for notes tendered by the expiration time.

Each tender offer is conditioned upon the receipt of consents from holders of a majority of the principal amount of the applicable notes. WMG Acquisition and WMG Holdings intend to execute supplemental indentures once they receive the required consents.

WMG Acquisition and WMG Holdings said they will call for redemption all of their respective notes that remain outstanding following the acquisition.

Credit Suisse Securities (USA) LLC (212 325-5912 or 800 820-1653) and UBS Securities LLC (203 719-4210 or 888 719-4210) are the dealer managers and solicitation agents. D.F. King & Co., Inc. (800 714-3312 or 212 269-5550) is the information agent.

Warner is a New York-based music company that owns record labels including Asylum, Atlantic, Cordless, East West, Elektra, Nonesuch, Reprise, Rhino, Roadrunner, Rykodisc, Sire, Warner Bros. and Word.

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