Pegasus gets consents to amend Tenneco notes, extends early tender date

By Marisa Wong

Los Angeles, July 13 – Pegasus Merger Co. announced completion of the consent solicitations, amendment of its tender offers and termination of change-of-control offers for two senior notes issued by Tenneco Inc., according to a Wednesday press release.

The two notes are Tenneco’s $800 million 5 1/8% senior secured notes due 2029 (Cusips: 880349AT2, U88037AG8) and $500 million outstanding 7 7/8% senior notes due 2029 (Cusips: 880349AS4, U88037AF0).

Pegasus, an affiliate of certain investment funds managed by affiliates of Apollo Global Management, Inc., started the tender offers on June 27 in connection with its acquisition of Tenneco agreed to on Feb. 22.

At the same time, Pegasus began soliciting consents from holders of each series of notes. The company was seeking to eliminate the requirement under each series of notes to make a change-of-control offer at 101.

The change-of-control offers also opened on June 27. The tender offers and change-of-control offers were separate, and noteholders could only choose one or the other.

As of 5 p.m. ET on July 12, Pegasus had received tenders and consents from holders of $766,221,000, or 95.78%, of the 5 1/8% notes and $489,332,000, or 97.87%, of the 7 7/8% notes.

As a result, Tenneco and the trustee under each of the indentures for the 5 1/8% notes and 7 7/8% notes executed supplemental indentures to effect the proposed amendments. The amendments will become operative once a majority in principal amount of each of the 5 1/8% notes and 7 7/8% notes are accepted for purchase.

Because the necessary consents have been received and a supplemental indenture has been executed for each series, the company is terminating the change-of-control offer.

On Wednesday the company also announced it amended the terms of the tender offers to extend the early tender deadline to 5 p.m. ET on July 19 from 5 p.m. ET on July 12.

For each $1,000 note, the company is offering a total consideration of $1,012.50, inclusive of a $30 early tender premium that will only be paid to noteholders who tender by the updated early deadline.

Noteholders will also be paid accrued interest on the notes to the settlement date.

The tender offer will expire at 5 p.m. ET on July 26.

The company said it intends to further extend the expiration of the tender offer.

The expectation is that the consummation of the tender offer and the consent solicitation will coincide with the closing of the merger. The acquisition is expected to be completed in the second half of 2022.

Tenders may no longer be withdrawn, and consents may not be revoked.

There is not a financing condition for the tender offer.

Global Bondholder Services Corp. (866 654-2015, 212 430-3774) is the information and tender agent.

BofA Securities (980 388-0539, 888 292-0070) and Citigroup Global Markets Inc. (212 723-6106, 800 558-3745, ny.liabilitymanagement@citi.com) are the dealer managers for the tender offer and consent solicitation.

Tenneco is a Lake Forest, Ill.-based company that manufactures vehicle parts for the original equipment markets and aftermarket.

Apollo is a global, high-growth alternative asset manager.

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