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Hutchinson Technology Announces Notes Repurchase And Private Placement Financing

HUTCHINSON, Minn., Jan. 23, 2013 (GLOBE NEWSWIRE) -- Hutchinson Technology Incorporated (Nasdaq:HTCH) announced today that it completed the repurchase of $18,682,000 aggregate principal amount of its outstanding 8.50% Convertible Senior Notes due 2026 (the "8.50% Convertible Notes") from certain holders for cash totaling $11,582,840, plus accrued and unpaid interest. The repurchased 8.50% Convertible Notes are being retired, and a total of $39,822,000 aggregate principal amount of 8.50% Convertible Notes remain outstanding.

The repurchase was financed through a private placement completed January 22, 2013, with an accredited institutional investor for the sale of $12,200,000 aggregate principal amount of 10.875% Senior Secured Second Lien Notes due 2017 (the "10.875% Notes"). The company received cash proceeds of $11,590,000 from the private placement, all of which were used to fund the repurchase of the 8.50% Convertible Notes.

David Radloff, Hutchinson Technology's chief financial officer, said the refinancing improves the company's financial position by extending the maturity on a portion of its debt and reducing its overall debt balance by $6,482,000 while maintaining its cash levels.

The 10.875% Notes bear interest at a rate of 10.875% per annum, payable semiannually in arrears on January 15 and July 15 of each year, beginning July 15, 2013, and mature on January 15, 2017, unless redeemed or repurchased in accordance with their terms. The 10.875% Notes are secured by liens on substantially all of the personal and real property of the company, which liens rank equally and ratably with liens securing the company's outstanding 8.50% Senior Secured Second Lien Notes due 2017 (the "8.50% Secured Notes") and junior in priority to any liens securing the company's existing or future senior secured credit facilities (other than certain excluded assets).

In connection with the closing of the private placement, amendments to the company's existing senior secured credit facility agreement and the company's indenture governing its 8.50% Secured Notes became effective. The terms of the credit facility and indenture were amended to, among other things, permit the incurrence of the debt represented by the 10.875% Notes, the granting of the second priority liens to secure the 10.875% Notes and the repurchase of the 8.50% Convertible Notes.

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