Cleaver-Brooks prices tender offer for 12¼% secured notes due 2016

By Jennifer Chiou

New York, Dec. 10 - Cleaver-Brooks, Inc. announced that it will pay a total consideration of $1,103.62 for each $1,000 principal amount of 12¼% senior secured notes due 2016 tendered in its offer.

The total payment includes a consent payment of $30.00 per $1,000 principal amount of notes tendered by 5 p.m. ET on Dec. 7, the early tender date.

Holders also will receive accrued interest to the payment date, which is expected to be Dec. 19.

The total purchase price was set at noon ET on Dec. 10 using a yield to May 1, 2013 on the 0.625% U.S. Treasury note due April 30, 2013 plus a fixed spread of 50 basis points, minus accrued interest to but excluding the early payment date. The tender yield was 0.12%.

The tender offer will end at 11:59 p.m. ET on Dec. 21.

Settlement for notes tendered after the early deadline is expected promptly after the offer expiration date.

Those who tender after the early deadline will not receive the consent payment.

As reported, the offer and solicitation are being made in connection with a stock purchase agreement, under which an affiliate of investment funds managed by Harbour Group Industries, Inc. will acquire all of the outstanding stock of Cleaver-Brooks from Wellspring Capital Partners IV, LP.

In connection with the offer, Cleaver-Brooks also is soliciting consents to amend the notes to eliminate or modify substantially all of the restrictive covenants and events of default, to shorten the minimum redemption notice period to three days from 30 days and to release the liens on the assets securing the notes.

Holders who tender their notes must consent to the proposed amendments, and holders who consent to the proposed amendments must tender their notes.

The tender offer and the solicitation are contingent upon completion of the acquisition under the stock purchase agreement, tenders and consents for at least a majority of the outstanding notes and the execution of a supplemental indenture to the notes.

RBC Capital Markets, LLC (877 381-2099 or 212 618-7822) is dealer manager and solicitation agent. Global Bondholder Services (866 470-4300) is depositary and information agent.

Cleaver-Brooks is a Milwaukee-based manufacturer of packaged and engineered boilers. It launched the offer on Nov. 27.

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