Unisys sets price for stock to be issued in exchange offers for notes

By Angela McDaniels

Tacoma, Wash., July 13 - Unisys Corp. said the per-share price at which its common stock will be issued in its exchange offers is $1.5554.

As previously reported, the company began private exchange offers and consent solicitations for its $300 million 6 7/8% senior notes due 2010, $400 million 8% senior notes due 2012, $150 million 8½% senior notes due 2015 and $210 million 12½% senior notes due 2016 on June 30.

The offers began after Unisys canceled a previous offer to exchange the notes in a private placement for new 12 5/8% senior secured notes due 2014. That offer was scheduled to expire July 1.

Unisys is offering to exchange the notes in private placements for new 12¾% senior secured notes due 2014 (the "first-lien notes"), new 14¼% senior secured notes due 2015 (the "second-lien notes"), $30 million in cash and up to the lesser of 73,697,327 shares of the common stock and 19.9% of the number of shares outstanding on the date the transaction closes.

The early tender date is 5 p.m. ET on July 14, and the tender offers will expire at midnight ET on July 28.

The company is offering $950 principal amount of new 12¾% notes and $200 in cash for each 6 7/8% note tendered by the early tender date and $1,100 in new 12¾% notes for each note tendered after that time.

For 8% notes tendered by the early tender date, holders will receive $900 principal amount of new 12¾% notes and $100 of stock. For notes tendered after that time, holders will receive $850 principal amount of new 14¼% notes and $100 of stock.

The company is offering $500 principal amount of new 14¼% notes and $250 of stock for each $1,000 principal amount of 8½% or 12½% notes tendered by the early tender date. Holders who tender after that time will receive $450 principal amount of new 14¼% notes plus $250 of stock.

The per-share stock price was calculated based on the volume-weighted average price of Unisys' common stock for the 10 trading days ended July 8.

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

No separate consent fee will be paid in the offers.

Unisys noted that if more than $150 million principal amount of 6 7/8% notes are tendered prior to the early tender date, holders of those notes will receive a pro rata share of $30 million of cash and will be issued an additional principal amount of new 12¾% notes in lieu of cash in excess of that pro rata share.

If more than $161.1 million principal amount of 8% notes are tendered prior to the early tender date, holders of those notes will receive a pro rata share of $145 million principal amount of new 12¾% first-lien notes and will be issued 14¼% notes in lieu of 12¾% notes in excess of that pro rata share.

Consent solicitation

Unisys is soliciting consents to proposed amendments to the indentures under which the notes were issued that would eliminate substantially all of the restrictive covenants and some events of default.

A tender of notes will constitute a consent.

The proposed amendments will be effected for a series of notes if consents are received from holders of at least a majority in principal amount of that series.

If the proposed amendments are adopted by the 6 7/8% notes, the 8% notes and the 8½% notes, each voting as a separate class, the company's U.S. real estate and the stock and debt of its domestic operating subsidiaries will be included as collateral for the new notes.

The exchange offers are not conditioned on obtaining the consents from holders of any series of notes.

The completion of each exchange offer is conditioned on the receipt of tenders for at least 40% of the principal amount of each of the 6 7/8% notes and the 8% notes.

The company negotiated the terms of the new exchange offers with representatives of an ad hoc bondholder group that includes investors holding approximately 40% of the notes.

Members of the group who hold about 25.6%, 23.8%, 54.0% and 15.8% of the outstanding principal amount of 6 7/8% notes, 8% notes, 8½% notes and 12½% notes, respectively, have contractually committed to tender their notes in the exchange offers and to deliver their consents, according to a company news release.

The exchange offers are being made within the United States only to qualified institutional buyers as defined in Rule 144A under the Securities Act and outside the United States to non-U.S. investors.

New notes

The new notes will be guaranteed by Unisys Holding Corp., a wholly owned Delaware corporation that directly or indirectly holds the shares of substantially all of Unisys' foreign subsidiaries, and by the company's other material U.S. subsidiaries.

The first-lien notes and second-lien notes will be secured by first-priority liens and second-priority liens, respectively, by substantially all of the company's assets, except accounts receivable that are subject to one or more receivables facilities, real estate and the stock or debt of its U.S. operating subsidiaries (unless the amendments are adopted by the 6 7/8% notes, the 8% notes and the 8½% notes), cash or cash equivalents securing reimbursement obligations under letters of credit or surety bonds and certain other excluded assets.

Unisys is an information technology company based in Blue Bell, Pa.

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