Unisys (UIS) Surges On Debt Exchange Offers and Consent Solicitations
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Shares of Unisys Corporation (NYSE: UIS) are rocketing 16% higher today on heavier-than-normal volume following news after the close that the company the commenced private exchange offers and consent solicitations in respect of its number of Senior Notes.
The Company has commenced private offers to exchange its outstanding Senior Notes in private placements for new 12¾% Senior Secured Notes due 2014 to be issued by the Company (the “First Lien Notes”), new 14¼% Senior Secured Notes due 2015 to be issued by the Company (the “Second Lien Notes” and, together with First Lien Notes, the “New Secured Notes”), up to the lesser of (i) 73,697,327 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and (ii) 19.9% of the number of shares of Common Stock outstanding (excluding treasury shares) on the date the transaction closes, and up to $30.0 million in cash, as set forth in the table below. The Company has negotiated the terms of the exchange offers with representatives of an ad hoc bondholder group that, the Company has been advised, is comprised of investors holding approximately 40% of the Senior Notes in the aggregate. Members of the group who hold approximately 25.6%, 23.8%, 54.0% and 15.8% of the outstanding aggregate principal amount of 2010 Notes, 2012 Notes, 2015 Notes and 2016 Notes, respectively, have contractually committed to tender and not withdraw their Senior Notes in the exchange offers and to deliver their consents in favor of the proposed amendments of the indentures governing the Senior Notes.
The Company is also soliciting consents from holders of the Senior Notes to certain proposed amendments to the indentures under which the Senior Notes were issued, which, if effected, would eliminate substantially all of the restrictive covenants and certain events of default in those indentures.
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