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Tempur-Pedic International Inc.
("Tempur-Pedic" or the "Company")
, the world's largest bedding
provider, provided an update on the retirement of various debt financings of
Sealy Corporation ("Sealy") as a result of the completion of the acquisition
of Sealy on March 18, 2013.
Sealy's $235,000,000 aggregate principal amount of 10.875% Senior Secured
Notes due 2016 have been called for redemption and will be redeemed in full on
April 15, 2013. Sealy's $268,945,000 aggregate principal amount of 8.25%
Senior Subordinated Notes due 2014 have been called for redemption and will be
redeemed in full on April 22, 2013.
With respect to the 8% Senior Secured Third Lien Convertible Notes due 2016
(the "Sealy Convertible Notes"), the Sealy Convertible Notes are now
convertible only into cash, in an amount that adjusts during the Make-Whole
Period (as defined under the Supplemental Indenture governing the Sealy
Convertible Notes), and then becomes fixed thereafter. The Make-Whole Period
effectively expires on April 12, 2013.
As of the close of business on March 25, 2013, holders of approximately
$183,050,982 in Accreted Principal Amount of Sealy Convertible Notes had
converted into cash, representing approximately 80% of all the Sealy
Convertible Notes outstanding at the closing of the Sealy acquisition.
Holders of Sealy Convertible Notes who converted on March 19, 2013 received
approximately $2,325.43 per $1,000 Accreted Principal Amount of Sealy
Convertible Notes being converted. The amount that a holder will receive upon
conversion will decline slightly every day during the Make-Whole Period, and
holders of Sealy Convertible Notes who convert after April 12, 2013 will
receive only $2,200 per $1,000 Accreted Principal Amount of Sealy Convertible
Notes being converted.
Pursuant to the terms of the Second Supplemental Indenture for the Sealy
Convertible Notes, as described in the Company's Current Report on Form 8-K
filed on March 18, 2013, all material negative covenants (apart from the lien
covenant and related collateral requirements) have been eliminated from the
Supplemental Indenture governing the Sealy Convertible Notes, as well as
certain events of default and certain other provisions. In addition, the
Company and its non-Sealy subsidiaries will not provide any guarantees of any
obligations with respect to the Sealy Convertible Notes. The Sealy Convertible
Notes have been delisted from the New York Stock Exchange and the registration
of the Sealy Convertible Notes under the Securities Exchange Act of 1934, as
amended, will be terminated. The Company also expects that various rating
agencies will stop providing ratings with respect to the Sealy Convertible
Notes. All of the foregoing could have a material adverse impact on the
trading market and liquidity of the Sealy Convertible Notes.
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