THE GREAT ATLANTIC & PACIFIC TEA CO. (GAP) (B2/ BB) said Tuesday (Dec. 4) that it will increase the price it will pay for its 7.70% senior notes due 2004 under its previously announced tender offer. It raised the price to $1,062.50 per $1,000 principal amount from the originally announced $1,045 per $1,000 principal amount. All holders will also receive unpaid and accrued interest. As of the now-expired consent deadline, bondholders had tendered $113 million of the notes, a majority of the outstanding amount. A&P also announced that it will sell $225 million of 10-year notes, which it expects to complete this month, and plans to use the proceeds to buy back the 7.70% notes, as well as for general corporate purposes, including working capital. AS PREVIOUSLY ANNOUNCED, A&P, a Montvale, N.J. supermarket company, said Nov. 19 that it had begun a tender offer for any and all of its $200 million of outstanding 7.70% notes. The tender offer will expire at 11:59 p.m. ET on Dec. 17, subject to possible extension. The company said that in conjunction with the tender, it also commenced a consent solicitation to eliminate certain events of default and certain covenants in the indenture governing the notes. A&P initially offered to purchase tendered notes for $1,045.00 in cash for each $1,000 principal amount (amount since increased). Holders will also receive accrued and unpaid interest to the payment date. The purchase price includes a consent payment of $30.00 for each $1,000 principal amount of tendered notes that will be paid only for notes tendered prior to the now-expired consent date of 5:00 p.m. ET on Dec. 3. It said that consummation of the tender offer is subject to various conditions, including the valid tender (not subsequently withdrawn) of at least 80% of the outstanding aggregate principal amount of the notes. Lehman Brothers Inc. is the dealer manager and solicitation agent for the tender offer and the consent solicitation (contact: Scott Macklin at 212 455-3301 or collect at 212 681-2265). The information agent is D.F. King & Co., Inc. (800 769-4414) and the depositary is JP Morgan Chase Bank.

McLEODUSA INC. (MCLD) said Monday (Dec. 3) that it would undertake a comprehensive recapitalization and financial restructuring plan, which includes an exchange offer for the company's $2.935 billion of outstanding bond debt. Under terms of the Cedar Rapids, Iowa-based telecommunications company's restructuring, it will offer the bondholders at least $560 million of cash, plus about 14% of the new common stock of the revamped company. $535 million of the cash payment will be funded from the net proceeds of the planned sale of McLeod's telephone directory business to Forstmann, Little & Co., and the remaining $25 million will come from a new equity investment by Forstmann Little. McLeodUSA seeks a requisite 95% of bondholder acceptances of the exchange offer. It may pursue its restructuring via a pre-packaged Chapter 11 filing. McLeod said the elimination of the bond debt would save the company some $300 million in annual interest expense. It set forth no timetable for the prospective bond exchange offer and the related restructuring.

MARVEL ENTERPRISES, INC. (MVL) said Monday (Dec. 3) that it has arranged for a new $80 million senior credit facility with HSBC Bank USA. The facility has two separate components, the first of which is a $20 million revolving letter of credit facility renewable annually for 3 years, and the second is a three-year term loan for up to $60 million. The proceeds from the term loan are available only to purchase Marvel's 12% senior notes due 2009. The HSBC loan arrangement provides limits - not specified in the announcement - on the price that can be paid for the purchase of the senior notes, and establishes Jan. 31 as the absolute last date by which the senior notes can be purchased by the New York-based comic book and entertainment products company with the proceeds of the term loan.

BROWN SHOE COMPANY INC. (BWS) said Nov. 26 that it had obtained commitments for a new $350 million secured financing arrangement led by Bank of America. As a result, the St. Louis-based footwear retailer expects to call its currently outstanding $100 million 9.5% notes due in 2006. It did not give a timetable for the expected note redemption.

THE KRYSTAL CO. is currently in the process of a "modified Dutch auction" tender offer for up to $30 million of its outstanding 10.25% senior notes due 2007. The Chattanooga, Tenn.-based restaurant chain operator said Nov. 16 that it is inviting holders to submit offers to sell notes, at a price determined by each holder, within a range of $600 to $650 per $1,000 principal amount. Holders whose notes are accepted for purchase will also receive accrued and unpaid interest upon consummation of the tender offer. The tender offer will expire at 5:00 p.m. ET on Dec. 17, subject to possible extension. Tenders of notes may be made or withdrawn at any time prior to the expiration date. There is no condition that a minimum principal amount of notes be offered for sale. Under the "modified Dutch auction" procedure, the company will accept notes offered for sale in the following order: first, offers to sell notes which do not specify an offer price or which specify a price of $600 per $1,000 principal amount and continuing with offers to sell notes in order of increasing offer price until Krystal has accepted $30 million aggregate principal amount of notes, excluding accrued interest. The company will pay all holders whose offers are accepted a "clearing price" (i.e., the highest price offered for notes that are accepted for purchase), even if that price is higher than the price offered by such holder. If the aggregate principal amount of notes offered at the clearing price exceeds $30 million, acceptances of offers at the clearing price will be allocated among holders on a pro-rata basis according to the principal amount so offered. Notes tendered above the clearing price will not be accepted. Krystal Company intends to finance the purchase of notes through a sale-and-leaseback transaction involving a total of approximately 38 of its restaurant properties. The company's obligation to purchase notes is subject to, among other things, the availability of sufficient funds to complete the purchase of notes offered for sale and the obtaining of a new senior credit facility on terms acceptable to the company. The company has not obtained any firm commitments related to the sale and leaseback transaction or new credit facility, and there can be no assurance that any such commitments will be obtained in the future. Banc of America Securities LLC (call toll-free at 888/292-0070 or collect at 704/388-4813) is the exclusive dealer manager, SunTrust Bank is the depositary, and D.F. King & Co., Inc. (call 212-269-5550 or collect at 800/488-8095) is the information agent.

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