99 Cents collects no more tenders in exchange for 11% notes due 2019

By Susanna Moon

Chicago, Dec. 8 – 99 Cents Only Stores LLC said it received tenders for $242,228,000, or 96.89%, of its $250 million of 11% senior notes due 2019 in the offer that ended at 11:59 p.m. ET on Dec. 7.

No additional notes were tendered after the extended early tender deadline of 5 p.m. ET on Nov. 30, according to a company update on Friday.

Settlement is expected to occur on Dec. 14.

As announced Dec. 6, the response as of the early deadline exceeded the 95% minimum tender condition.

99 Cents announced the offer on Nov. 7 and then on Nov. 22 extended the early tender date from 5 p.m. ET on Nov. 22, increased the payment and amended some other terms.

The company was offering to exchange the notes for new 13% cash/PIK notes due 2023 or new 13% all PIK notes due 2023. The company also held a consent solicitation to amend the indenture of the 11% notes.

When it amended the terms, the company shortened the maturity date of the 13% cash/PIK notes to April 14, 2022 instead of June 15, 2023. It also amended some other terms of the new notes.

In addition the issuer increased the early tender amount by adding $7.50 in cash on top of the early tender premium of $30.00 in principal amount of new notes per $1,000 of existing notes.

99 Cents also amended the conditions to the exchange offer to add the 95% minimum tender condition.

Further, the company announced that it has amended the amount being offered in exchange for the existing notes held by affiliates of its controlling equityholders. The payment was changed from its 13% all PIK notes due 2023 to shares of new paid-in-kind series A-1 preferred stock of Number Holdings, Inc., the direct parent of 99 Cents, with an aggregate liquidation preference of $1,000 per share and $7.50 in additional aggregate liquidation preference of new preferred stock if tendered by the early tender date and an aggregate liquidation preference of $970 per share if issued after that.

The new notes were being issued under Rule 144A and Regulation S.

The new notes will be secured by a perfected security interest on substantially all of the company’s and each guarantor’s tangible and intangible assets and the equity interests issued by the company’s direct and indirect wholly owned subsidiaries, as previously noted.

The new secured notes will be effectively senior to all of the company’s existing and future unsecured debt, including the existing notes.

D.F. King & Co., Inc. (877 297-1747 or 212 269-5550) is the information agent for the exchange offer.

99 Cents is a City of Commerce, Calif.-based operator of extreme value stores.

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