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Headwaters Incorporated Commences Consent Solicitation Related To Its 7⅝% Senior Secured Notes Due 2019

Stocks in this article: HW

(NYSE: HW) – Headwaters Incorporated today announced that it has commenced a solicitation of consents (“Consent Solicitation”) from the holders of its 7⅝% Senior Secured Notes due 2019 (CUSIP No. 42210PAQ5) (the “Notes”) to certain proposed amendments to the indenture governing the Notes. As of November 12, 2013, $400.0 million aggregate principal amount of Notes were outstanding. The primary purpose of the Consent Solicitation and the proposed amendments is to modify certain restrictive covenants in the indenture.

Full details of the terms and conditions of the Consent Solicitation are included in the Consent Solicitation Statement (the “Statement”) and the accompanying Consent Letter, both of which are dated November 12, 2013.

“Building on our strong 2013 operating performance and reduced debt levels, we are pursuing consent from our bondholders to amend our existing senior secured indenture,” said Don P. Newman, Headwaters' Chief Financial Officer. “The amendments increase our senior secured borrowing capacity from 3.5 to 4.5 times Consolidated Cash Flow, as defined in the indenture. These changes provide us flexibility to maintain a balanced capital structure, while delivering value to our stockholders and taking advantage of favorable debt markets.”

“We also recently amended our ABL revolver, extending the maturity of the revolver from October 2014 to October 2018, improving pricing under the facility, gaining additional flexibility, and maintaining our existing revolver borrowing capacity,” noted Mr. Newman.

The adoption of the proposed amendments requires the consent of the holders of at least 66⅔% in aggregate principal amount of Notes outstanding (the “Required Consents”). The Consent Solicitation will expire at 5:00 p.m., New York City time, on Wednesday, November 20, 2013, unless extended or earlier terminated by Headwaters (the “Expiration Date”). Headwaters will make a cash payment of $15.00 per $1,000 principal amount of Notes (the “Consent Payment”) to each holder who delivers, and does not validly revoke, a properly completed and executed consent prior to the Expiration Date. Holders may revoke their consents at any time prior to the earlier of the Expiration Date, and the time at which the Required Consent has been obtained. Headwaters expects to make any and all Consent Payments as soon as practicable after the Expiration Date.

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