CSK sets pricing in tender for 12% notes

New York, Jan. 2 - CSK Auto Corp. said it will pay $1,126.465 plus accrued and unpaid interest per $1,000 principal amount of 12% senior notes due 2006 tendered in its offer to buy them for cash and related consent solicitation.

Holders who tendered with consents by 5.00 p.m. ET on Dec. 31 will receive an additional consent payment of $20 per $1,000 principal amount.

The payment was fixed at 10.00 a.m. ET on Jan. 2 by reference to a fixed spread above the yield to maturity of the 2.00% U.S. Treasury note due Nov. 30, 2004.

CSK Auto previously announced that holders of $265 million of the 12% senior notes due 2006 issued by its CSK Auto Inc. subsidiary tendered their notes and delivered related consents by the expiration of the consent solicitation at 5 p.m. ET Dec. 31.

CSK, a Phoenix-bassed company, said it executed a supplemental indenture but it will not become operative until the notes are purchased under the tender offer.

The tender offer expires at midnight ET Jan. 15.

Notes tendered before 5 p.m. ET Dec. 31 may no longer be withdrawn, except as required by law.

Completion of the tender offer is subject to completion of a new note offering and the amendment of CSK Auto Inc.'s senior credit facility, among other conditions.

CSK Auto (B2/B) announced the cash tender offer for all $280 million of the outstanding 12% senior notes due 2006 issued by CSK Auto Inc. on Dec. 16.

CSK said the tender offer consideration would be set at the pricing deadline of 10 a.m. ET Jan. 2, using a formula based upon a 100-basis point fixed spread over the yield at that time of the reference security, the 2% U.S. Treasury note due Nov. 30, 2004. The formula assumes that the notes would otherwise be redeemed in full at $1,060 per $1,000 principal amount on their first call date of Dec. 15, 2004.

The total consideration will include a $20 per $1,000 principal amount consent payment for those holders who tender their notes and thus deliver their consents to the proposed indenture amendments eliminating substantially all of the restrictive covenants and certain default provisions by the consent deadline. Noteholders tendering after the consent deadline will not receive the consent payment but only the tender offer consideration.

All tendering noteholders will also receive the accrued and unpaid interest up to, but not including, the payment date. The settlement date is expected to be Jan. 16, subject to possible extension.

Noteholders who wish to tender their notes must also consent to the proposed indenture amendments, and they may not deliver consents without also tendering the related notes. Holders may not revoke consents without also withdrawing the notes tendered under the terms of the tender offer. Holders who tender their notes and deliver their consents at or before the consent deadline may withdraw their tenders and revoke their consents at any time up to that deadline but may not do so afterwards, except as may be required by law.

CSK said that the tender offer and consent solicitation is part of its plan to refinance its existing debt to reduce its annual interest expense. The tender offer and consent solicitation will be funded by a previously announced $100 million increase in the company's existing senior credit facility to $425 million, by the issuance of $200 million of new notes and with cash on hand.

Credit Suisse First Boston LLC is the dealer-manager and solicitation agent for the tender offer and consent solicitation (call Liability Management Group at 800 820-1653). MacKenzie Partners Inc. is the information agent (212 929-5500).

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