Advantica raises price in exchange offer, reduces threshold further

New York, March 25 - Advantica Restaurant Group, Inc. increased the amount of new notes it is offering in its debt exchange and further reduced the amount of notes that must be tendered for the transaction to go ahead.

The Spartanburg, S.C. company is now offering $800 principal amount of new 12.75% senior notes due 2007 to be jointly issued by Advantica and Denny's Holdings, Inc., up from $770 principal amount previously. Both amounts are per $1,000 principal of its existing 11.25% senior notes due 2008.

Advantica will issue up to $212.0 million of the new notes, up from $204.1 million previously. The company has $529.6 million of the old notes outstanding.

In addition, the company lowered to $50 million from $60 million the principal amount of the old notes that must be tendered for the exchange to be completed. It had earlier cut the threshold from $160 million.

The new expiry date for the offer is 5.00 p.m. ET on April 9, pushed back from 5.00 p.m. ET on March 25.

Advantica said that so far $56.8 million of the old notes have been tendered, up marginally from the $56.7 million it reported early on March 21.

Previously Advantica extended the offer deadline 12 times.

The proposal had run into opposition from bondholders who organized an unofficial committee to fight the proposal.

The bondholders' committee has previously said it has support of holders of approximately $400 million principal amount of the notes. That appeared to be sufficient to block the exchange as it previously stood since Advantica's offer was subject to at least $160 million of the $529.6 million outstanding notes being tendered.

The noteholders have told the company that they are not opposed to a deleveraging transaction of some type but believe "the elimination of $60 million in principal proposed by Advantica is not appropriate or fair to bondholders."

UBS Warburg LLC is dealer manager in the exchange offer.

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