Tops Holding lifts tender offer cap to $60 million for 8¾%/9½% notes

By Marisa Wong

Madison, Wis., May 29 – Tops Holding II Corp. said it has increased the maximum tender amount of its previously announced cash tender offer for its $150 million outstanding 8¾%/9½% senior notes due 2018. The tender cap is now $60 million, increased from $50 million, according to a press release.

The tender offer began on May 26 and expires at 11:59 p.m. ET on June 22.

As previously announced, the company will pay $1,020 per $1,000 principal amount of 8¾%/9½% notes. This includes an early tender premium of $30 for each $1,000 principal amount of notes tendered by 5 p.m. ET on June 8, the early tender date.

Holders will also receive accrued interest up to but excluding the settlement date.

The issuer currently expects the settlement date for notes tendered by the early tender date to be June 9.

If the amount of notes tendered exceeds the cap, the amount of notes purchased will be prorated.

If the amount of notes tendered by the early tender date exceeds the cap, the company does not expect to accept for purchase any notes tendered after the early tender date.

If the amount of notes tendered by the early tender date is less than the cap, the company expects to accept for purchase all notes tendered before the early tender date, and only notes tendered after the early tender date and before the expiration time will be subject to possible proration.

8 7/8% notes offer

Separately, Tops Holding LLC, Tops Markets, LLC and Tops Markets II Corp. began a tender offer for their $460 million of 8 7/8% senior secured notes due 2017.

That offer also began on May 26 and expires at 11:59 p.m. ET on June 22.

The holders of the 8 7/8% notes are also being asked to consent to proposed amendments that would eliminate most of the restrictive covenants and some events of default in the indenture governing the notes and release all of the collateral securing the notes.

Consents are needed from the holders of at least a majority of the 8 7/8% notes in order to amend the indenture, and consents are needed from the holders of at least 75% of the notes in order to approve the collateral release.

The issuers will pay $1,049.38 per $1,000 principal amount of 8 7/8% notes. This includes a consent payment of $30 for each $1,000 principal amount of notes tendered by 5 p.m. ET on June 8, the consent expiration.

Holders will also receive accrued interest up to but excluding the settlement date.

The issuers currently expect the settlement date for notes tendered by the consent expiration to be June 9.

Holders who tender their notes must consent to the proposed amendments and release and vice versa.

The offers are subject to the completion of a capital markets debt financing. The offer for the 8 7/8% notes is conditioned on the receipt of the consents necessary for the proposed amendments and release. Neither tender offer is conditioned on the completion of the other.

The dealer manager and solicitation agent is BofA Merrill Lynch (888 292-0070 or 980 387-2113). The depositary and information agent is D.F. King & Co., Inc. (866 864-7964 or, for banks and brokers, 212 269-5550).

Tops is a supermarket retailer based in Williamsville, N.Y.

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