FXI begins exchange, solicitation for 7 7/8% secured notes due 2024

Chicago, April 3 – FXI Holdings, Inc. commenced an exchange offer and consent solicitation for all of its $504,746,000 outstanding 7 7/8% senior secured notes due 2024 (Cusips: 36120RAA7, U36251AA1), according to a press release.

The company is offering to exchange each $1,000 existing note for $940 principal amount of new 12¼% senior secured notes due 2026 and $60 in cash.

Additionally, in terms of the total consideration, consenting noteholders will receive a $40 consent fee. Tendering noteholders will be delivering consents.

The company is asking noteholders to consent to the elimination of substantially all of the restrictive covenants, certain of the default provisions and certain other provisions contained in the indenture for the existing notes. The company also is asking for noteholders to consent to the release of all collateral securing the 2024 notes.

For the solicitation to be successful, noteholders representing a majority of the existing notes must agree to the proposed amendments and representatives of two-thirds of the notes must consent to the collateral release.

Support agreement

FXI has already worked out a transaction support agreement, dated March 13, with holders of approximately $394.9 million principal amount of the existing notes, or 78.2% of those notes.

The support parties have agreed to validly tender all of their existing notes and deliver the related consents.

Supporting parties are receiving a support party fee as consideration for their commitments.

Also pursuant to the support agreement, certain indirect shareholders of the company will arrange an investment in the capital stock of an indirect parent of the company for $50 million cash consideration. Through a series of transactions, ultimately the cash consideration will be contributed to FXI as common equity.

The equity investment and borrowings under an asset-based revolver will be used to pay the cash portion of the settlement consideration and other fees and expenses related to the refinancing transactions, including the support party fee.

Details

The early tender date is 5 p.m. ET on April 17. This is also the deadline for consenting holders who wish to receive the consent fee and the withdrawal deadline.

Noteholders who tender after the early tender date but before the expiration time at 11:59 p.m. ET on April 28 will receive the consideration of $940 in new notes and $60 in cash, but will not receive the $40 consent fee.

Accrued interest will also be paid to the settlement date, May 1.

Interest on the new notes, for the sake of clarity, will accrue from the date of first issuance of the new notes.

The exchange offer and consent solicitation are conditioned on noteholders representing at least 90% of the principal amount of existing notes tendering their notes before the expiration date.

Ipreo LLC is the exchange agent (ipreo-exchangeoffer@ihsmarkit.com).

Jefferies is acting as a dealer manager on the transaction, a source noted.

FXI Holdings is a Media, Pa.-based polyurethane foam producer.

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