Ply Gem Industries fails to meet minimum in exchange for 9% notes

By Jennifer Chiou

New York, Dec. 18 - Ply Gem Industries, Inc. ended an unsuccessful exchange offer after falling short of the $30 million minimum in the offer for its $360 million of 9% senior subordinated notes due 2012, according to an 8-K filing with the Securities and Exchange Commission.

The offer began on Nov. 19.

Caxton-Iseman (Ply Gem) III, LP and Caxton-Iseman (Ply Gem) IV, LP own $281,294,000 of the old notes. It was a condition to the exchange offer that these noteholders agree that instead of tendering in the exchange offer, they would exchange their notes for $78,137,000 principal amount of series A notes and $203,157,000 principal amount of series B notes following the successful completion of the exchange offer without any amendment or waiver of its terms and conditions.

The exchange offer was also conditioned on the receipt of at least $30 million principal amount of old notes, excluding the old notes held by the Caxton-Iseman noteholders.

The company was offering up to $21,863,000 principal amount of series A senior subordinated notes due 2017 and up to $56,843,000 principal amount of series B senior subordinated notes due 2017 in exchange for up to $78,706,000 principal amount of the 9% notes.

The new series A notes and series B notes were to have identical terms except for the coupon, which was to be 7% for the series A notes and 12¼% for the series B notes.

Holders would have received $1,000 principal amount of new notes for each $1,000 principal amount of notes tendered by 5 p.m. ET on Dec. 3, the early tender date.

Holders who tendered after that time but prior to the offer expiration, midnight ET on Dec. 17, were to have received $950 principal amount of new notes for each $1,000 principal amount of notes tendered.

Each tendering holder was to have first received series A notes. To the extent that the principal amount of tendered old notes exceeds $21,863,000, the principal amount of series A notes to be issued to each tendering holder was to be prorated based on the total amount of old notes tendered and rounded down to the nearest multiple of $1,000.

The principal amount of the series B notes to be issued to each tendering holder was to be equal to the difference between the principal amount of the old notes tendered by that holder and the principal amount of series A notes received.

Holders were also to receive accrued interest up to but excluding the settlement date.

The new notes were to be unsecured and subordinated to all of the company's existing and future senior debt, including borrowings under its senior secured asset-based revolving credit facility and its 11¾% senior secured notes due 2013.

The new notes were to initially be jointly and severally guaranteed on a senior subordinated basis by parent company Ply Gem Holdings, Inc. and all its subsidiaries located in the United States other than certain unrestricted subsidiaries.

The notes issued to the Caxton-Iseman noteholders were not to be fungible with the new notes and were to be issued under a different indenture. The Caxton-Iseman notes were to have substantially identical terms as the new notes, except that they would have been subordinated in right of payment to the new notes under certain circumstances.

The offer was being made only in the United States to holders of old notes who are qualified institutional buyers as defined in Rule 144A under the Securities Act, in the United States to holders of old notes who are accredited investors as defined in Rule 501(a) of Regulation D under the Securities Act and outside the United States to holders of old notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act.

The information agent was D.F. King & Co., Inc. (800 967-4612 or 212 269-5550).

Ply Gem Industries is a Cary, N.C.-based manufacturer of residential exterior building products.

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