The Bon-Ton Stores, Inc. (NASDAQ: BONT) (“Bon-Ton”) today announced that The Bon-Ton Department Stores, Inc., a wholly-owned subsidiary of Bon-Ton (the “Issuer”), has commenced an offer to certain eligible noteholders described below to exchange any and all of its outstanding 10¼% Senior Notes due 2014 (CUSIP Nos 09776NAB8 and 09776NAA0, ISIN USU09818AA04) (the “Old Notes”) for newly issued 10⅝% Second Lien Senior Secured Notes due 2017 (the “New Notes”), upon the terms and conditions set forth in the Confidential Offering Memorandum and Consent Solicitation Statement dated June 4, 2012 (the “Exchange Offer”).
The purpose of the Exchange Offer is to enhance Bon-Ton’s financial flexibility by refinancing the Old Notes to 2017.
Eligible holders that validly tender and do not validly withdraw their Old Notes in the Exchange Offer prior to 5:00 p.m., New York City time, on June 15, 2012 (the “Early Deadline”) will receive $1,000 in principal amount of New Notes per $1,000 principal amount of Old Notes, which includes a “Consent and Early Tender Payment” of $30 in principal amount of New Notes. For any Old Notes tendered after the Early Deadline, eligible holders will receive $970 in principal amount of New Notes per $1,000 principal amount of Old Notes. Eligible holders will also receive accrued and unpaid interest in cash on the exchanged Old Notes through, but not including, the settlement date for the Exchange Offer.
The New Notes will be secured by a second-priority lien on substantially all of the current and future assets of Bon-Ton and certain subsidiaries of Bon-Ton and will mature on July 15, 2017.In conjunction with the Exchange Offer, the Issuer is soliciting consents (the “Consent Solicitation”) to amend the indenture governing the Old Notes. There is no minimum amount of Old Notes that must be tendered in the Exchange Offer, and the Exchange Offer is not conditioned upon the completion of the Consent Solicitation. However, if consents from holders of a majority of the Old Notes are not received, interests in new second lien secured loans, and not New Notes, will be delivered in exchange for the Old Notes tendered in the Exchange Offer. Holders who tender their Old Notes in the Exchange Offer will be deemed to have submitted consents pursuant to the Consent Solicitation.