UAP, United Agri Products again extend tender offers for 8¼%, 10¾% notes

New York, June 7 - UAP Holding Corp. (Caa2/B-) and its United Agri Products Inc. (B3/B) unit said they have extended their previously announced tender offers and related consent solicitations for UAP's 10¾% senior discount notes due 2012 and United Agri Products' 8¼% senior notes due 2011.

Those offers were extended to 5 p.m. ET on June 11, subject to possible further extension, from the original deadline for each of 5 p.m. ET on June 4.

The companies said that as of 5 p.m. ET on June 4, all $125 million outstanding principal amount of the 10¾% notes had been tendered as well as all $225 million outstanding principal amount of the 8¼% notes, unchanged from the levels announced on May 24, when the tender offers had last been extended.

As previously announced, UAP and United Agri Products - a Greeley, Colo.-based distributor of seeds and agricultural chemicals - said on April 27 that UAP was offering to buy for cash any and all of its outstanding $125 million principal amount of 10¾% notes, while United Agri Products would purchase for cash any and all of its $225 million of 8¼% notes. The companies said they were also soliciting noteholder consents to proposed indenture changes that would eliminate most of the restrictive covenants in the respective indentures and would eliminate the registration rights and liquidated damages provided for in the registration rights agreements of the notes.

The companies initially set a consent deadline of May 7 and said the tender offers would expire at 9 a.m. ET on May 24; both deadlines were subsequently extended.

UAP initially said the total consideration to be paid for tendered 10¾% notes would be $819.04 per $1,000 principal amount at maturity, including a $20 per $1,000 consent payment payable to holders who validly tender their notes by the consent deadline. That consideration was subsequently amended.

United Agri Products said that total consideration for tendered 8¼% notes would be a blended price, based upon the $1,082.50 per $1,000 principal amount price at which United Agri Products could redeem a portion of the notes with the proceeds of an equity offering, and the present value of future cash flows up to and including Dec. 15, 2007 - the first date on which the notes may be redeemed - on the notes, based on the assumption that the notes will be redeemed in full at $1,041.25 per $1,000 principal amount on such date, discounted at a rate equal to 137.5 basis points over the yield to maturity on the 3% U.S. Treasury note due Nov. 15, 2007.

United Agri Products said the total consideration on the 8¼% notes would include a $20 per $1,000 principal amount consent payment for holders who tender by the consent deadline, and it will also include accrued but unpaid interest up to, but not including, the payment date.

Holders tendering their notes after the consent deadline but before the offer expires would not receive the consent payment.

UAP and United Agri Products said they both expect to pay for any of their respective notes purchased in same-day funds on a date promptly following the expiration of its tender offer and consent solicitation.

On May 7, UAP said it had amended the total consideration it is offering to the holders of the 10¾% notes; such consideration would now be calculated as the product of (x) the accreted value of the 10¾% notes on the date that is 30 days immediately following the payment date for the 10¾% notes' tender offer and (y) 116.125%, of which $20 would be the consent payment. The originally announced total consideration to be paid for the 10¾% notes was to have been $819.04 per $1,000 principal amount at maturity, of which $20 was the consent payment.

On May 10, United Agri Products said it had set the total consideration and tender offer consideration it will pay for the 8¼% notes; total consideration will be $1,123.56 per $1,000 principal amount of notes tendered, based on an assumed payment date of May 28. The total consideration includes a consent payment of $20 per $1,000 principal amount consent payment for holders who tendered by the May 10 consent deadline; holders tendering after the consent deadline but before the offer expiration will not receive the consent payment as part of their consideration.

On May 11, UAP and United Agri Products said they had received the required number of noteholder consents, with some $122.5 million in principal amount at maturity of the UAP 10¾% notes, or almost all of the outstanding amount, and $225 million of the United Agri Products' 8¼% notes, the entire outstanding amount, having been validly tendered by the consent deadline - which expired as scheduled at 5 p.m. ET on May 10 without extension. The companies said the amounts constitute the requisite consents needed by the companies to approve the changes in the indentures and registration rights agreements under terms of the tender offers.

The companies said the tender offers would each be conditioned upon the now-fulfilled condition of receipt by the company by the consent deadline of consents from the holders of at least a majority of the outstanding principal amount of the 8¼% notes and a majority of the outstanding principal amount at maturity of the 10¾% notes. "Majority" excludes any of the notes already owned by the companies or their affiliates.

They would also be conditioned upon United Agri Products amending its existing revolver and entering into a new senior secured second-lien term loan facility, the net proceeds of which will be used to pay the consideration for the notes purchased in the tender, and upon consummation of UAP Holdings' offering of Income Deposit Securities, the net proceeds of which will be used, among other things, to pay the consideration for the notes purchased in the tender offers.

On May 18, UAP said in an S-1A filing with the Securities and Exchange Commission that it plans to raise about $680 million via the sale of $640 million of income deposit securities, along with a separate offering of $39.7 million of senior subordinated notes due 2019.

The companies have retained UBS Investment Bank to act as dealer manager for the tender offers and consent solicitations (call the UBS Liability Management Group at 888 722-9555 ext. 4210 or collect at 203719-4210).

MacKenzie Partners Inc. is the information agent (call collect at 212 929-5500 or at 800 322-2885). JP Morgan Chase Bank is the depositary for the offer.

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