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buying property abroad
News and Information Article
Successful Consent Solicitations relating to the Outstanding 8-1/2% Senior
Secured Notes due 2010 issued by MSW Energy Holdings LLC and MSW Energy
Finance Co., Inc., 7-3/8% Senior Secured Notes due 2010 issued by MSW
Energy Holdings II LLC and MSW Finance Co. II, Inc. and 6.26% Senior Notes
due 2015 issued by Covanta ARC LLC
FAIRFIELD, N.J., Feb. 5 /-FirstCall/ -- Covanta Holding
Corporation ("Covanta") (NYSE: CVA) announced today, in connection with its
previously amended tender offers (the "Tender Offers") and consent
solicitations (the "Solicitations"), that as of 5:00 p.m., New York City
time, it has received the requisite consents from the holders of (a) the
outstanding 8-1/2% Senior Secured Notes due 2010 (the "MSW I Notes") issued
by MSW Energy Holdings LLC ("MSW Holdings I") and its wholly owned
subsidiary, MSW Energy Finance Co., Inc. ("MSW Finance I" and, together
with MSW Holdings I, "MSW I"); (b) the outstanding 7-3/8% Senior Secured
Notes due 2010 (the "MSW II Notes") issued by MSW Energy Holdings II LLC
("MSW Holdings II") and its wholly owned subsidiary, MSW Energy Finance Co.
II, Inc. ("MSW Finance II" and, together with MSW Holdings II, "MSW II");
and (c) the outstanding 6.26% Senior Notes due 2015 (the "ARC Notes" and,
together with the MSW I Notes and the MSW II Notes, the "Notes") of Covanta
ARC LLC ("ARC LLC" and, together with MSW I and MSW II, the "Issuers" and
each, an "Issuer") to amend the applicable indentures governing the Notes.
Covanta also has determined the price to be paid in connection with the
Tender Offers and the Solicitations for each of the Notes.
The Solicitations for each of the Notes expired today at 5:00 p.m., New
York City time (the "Consent Payment Deadline"). At that time, Covanta had
received tenders and consents from holders of 97.11% of the outstanding MSW
I Notes, 99.67% of the outstanding MSW II Notes and 99.24% of the
outstanding ARC Notes, in each case constituting the requisite consents to
amend the applicable indentures governing each of the Notes to eliminate
substantially all of the restrictive covenants and certain event of default
provisions. Each of the Issuers has entered into a supplemental indenture
with the respective trustee for the applicable Notes. The supplemental
indentures will become operative on acceptance of the Notes for purchase.
The "Total Consideration" to be paid for each Note validly tendered and
accepted for payment by the Consent Payment Date, will be equal to (1)
$1,096.46 for each $1,000 principal amount of the MSW I Notes, (2)
$1,079.92 for each $1,000 principal amount of the MSW II Notes and (3)
$729.82 for each $1,000 original principal amount of the ARC Notes.
The Total Consideration for the MSW I Notes was determined by the sum
of (a) the price of the MSW I Notes using standard market practice to the
target redemption date of September 1, 2007 at a fixed spread of 50 basis
points over the bid-side yield on the 4% U.S. Treasury Note due August 31,
2007, at 2:00 p.m., New York City time, on February 5, 2007, minus accrued
but unpaid interest to, but not including, the date of purchase plus (b)
the amount of accrued but unpaid interest thereon to but not including the
date of purchase.
The Total Consideration for the MSW II Notes was determined by the sum
of (a) the price of the MSW II Notes using standard market practice to the
target redemption date of September 1, 2007 at a fixed spread of 50 basis
points over the bid-side yield on the 4% U.S. Treasury Note due August 31,
2007, at 2:00 p.m., New York City time, on February 5, 2007, minus accrued
but unpaid interest to, but not including, the date of purchase plus (b)
the amount of accrued but unpaid interest thereon to but not including the
date of purchase.
The Total Consideration for the ARC Notes was determined by the sum of
(a) the price of the ARC Notes using standard market practice based on the
present value of all remaining principal and interest payments discounted
at a fixed spread of 50 basis points over the bid-side yield on the 4-5/8%
U.S. Treasury Note due December 31, 2011, at 2:00 p.m., New York City time,
on February 5, 2007, minus accrued but unpaid interest to, but not
including, the date of purchase plus (b) the amount of accrued but unpaid
interest thereon to but not including the date of purchase.
The Total Consideration for each Note so tendered includes a consent
payment of $30 for each $1,000 principal amount of the MSW I and MSW II
Notes and $1,000 original principal amount of the ARC Notes (the "Consent
Payment"). Holders whose valid tenders are received after the Consent
Payment Deadline, but on or prior to 5:00 p.m., New York City time, on
February 21, 2007 (the "Expiration Date"), will receive the Tender Offer
Consideration (as defined below) but will not be entitled to receive the
Consent Payment. The "Tender Offer Consideration" is the Total
Consideration less the Consent Payment.
Covantas obligation to accept for purchase and to pay for the Notes
validly tendered and consents validly delivered, and not validly withdrawn
or revoked, pursuant to the Tender Offers is subject to and conditioned
upon the satisfaction of or, where applicable, Covantas waiver of, certain
conditions including the receipt of proceeds sufficient to finance the
Tender Offers and related Solicitations from Covantas proposed new
financings that were separately announced on January 19, 2007, consisting
of offerings of common stock and convertible debentures (both of which have
successfully closed) and new senior secured first lien credit facilities of
Covantas wholly owned subsidiary, Covanta Energy Corporation, which
proceeds, together with cash on hand, are sufficient to fund the tender
offers. The Tender Offers are also subject to customary closing conditions.
If any of the conditions are not satisfied, Covanta is not obligated to
accept for payment, purchase or pay for, or may delay the acceptance for
payment of, any tendered Notes, and may terminate the Tender Offers. Full
details of the terms and conditions of the Tender Offers are described in
more detail in the Offer to Purchase and Consent Solicitation Statement
dated January 23, 2007, as supplemented by the Supplement thereto dated
January 31, 2007 (as supplemented, the "Offer to Purchase").
Lehman Brothers Inc. is acting as exclusive dealer manager and
solicitation agent for each of the Tender Offers and related Solicitations.
The information agent and tender agent for each of the tender offers is
D.F. King & Co., Inc. Questions regarding the Tender Offers and related
Solicitations of consents may be directed to Lehman Brothers Inc.,
telephone number (800) 438-3242 (toll free) and (212) 528-7581 (call
collect). Requests for copies of the Offer to Purchase and related
documents may be directed to D.F. King & Co., Inc., telephone number (800)
758-5378 (toll free) and (212) 269-5550 (banks and brokerage firms).
Detailed contact information for D.F. King & Co., Inc. is also provided in
the Offer to Purchase.
This announcement is not an offer to purchase, a solicitation of an
offer to sell, or a solicitation of consents with respect to the Notes nor
is this announcement an offer to sell or solicitation of an offer to
purchase new securities. The tender offers and related solicitations of
consents are made solely by means of Covantas Offer to Purchase and
related Letter of Transmittal and Consent.
Covanta Holding Corporation is a New York Stock Exchange listed company
engaging in waste disposal, energy services and specialty insurance through
its subsidiaries. Covantas subsidiary, Covanta Energy Corporation, is an
internationally recognized owner and operator of energy-from-waste and
power generation projects.
About the Issuers
ARC LLC owns partnerships that develop, own and operate
energy-from-waste facilities, which combust municipal solid waste and
produce energy in the form of electricity and steam. Through such
partnerships, ARC LLC owns or controls six energy-from-waste facilities
located in the northeastern United States (the "ARC operating facilities").
The subsidiaries of ARC LLC that operate the ARC operating facilities
derive revenues principally from disposal or tipping fees received for
accepting waste and from the sale of electricity and steam produced by the
ARC operating facilities.
Each of MSW Holdings I and MSW Holdings II hold indirectly a 50%
interest in ARC LLC. MSW Finance I and MSW Finance II were each formed in
2003 solely for the purpose of serving as a co-issuers of the MSW I Notes
and the MSW II Notes, respectively, in order to facilitate the offering of
the MSW I Notes and the MSW II Notes. Other than serving as a co-issuers of
the MSW I Notes and MSW II Notes, neither MSW Finance I nor MSW Finance II
have any operations or assets and do not have any revenues.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this press release may constitute
"forward-looking" statements as defined in Section 27A of the Securities
Act of 1933 (the "Securities Act"), Section 21E of the Exchange Act of 1934
(the "Exchange Act"), the Private Securities Litigation Reform Act of 1995
(the "PSLRA") or in releases made by the Securities and Exchange
Commission, all as may be amended from time to time. Such forward-looking
statements involve known and unknown risks, uncertainties and other
important factors that could cause the actual results, performance or
achievements of Covanta and its subsidiaries, or industry results, to
differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Statements that
are not historical facts are forward-looking statements. Forward-looking
statements can be identified by, among other things, the use of
forward-looking language, such as the words "plan," "believe," "expect,"
"anticipate," "intend," "estimate," "project," "may," "will," "would,"
"could," "should," "seeks," or "scheduled to," "proposed", or other similar
words, or the negative of these terms or other variations of these terms or
comparable language, or by discussion of strategy or intentions. These
cautionary statements are being made pursuant to the Securities Act, the
Exchange Act and the PSLRA with the intention of obtaining the benefits of
the "safe harbor" provisions of such laws. Covanta and the Issuers caution
investors that any forward-looking statements made by Covanta or the
Issuers are not guarantees or indicative of future performance. Important
assumptions and other important factors that could cause actual results to
differ materially from those forward-looking statements with respect to
Covanta include, but are not limited to, those factors, risks and
uncertainties that are described in Item 1A of its Annual Report on Form
10-K for the year ended December 31, 2005, its Quarterly Report on Form
10-Q for the period ended September 30, 2006, and in other securities
filings by Covanta or its subsidiaries and with respect to the Issuers,
include but are not limited to those factors, risks and uncertainties that
are described in Item 1A "Risk Factors" of MSW I and MSW IIs respective
Annual Reports on Form 10-K for the year ended December 31, 2005 and of the
MSW I and MSW II joint Quarterly Report on Form 10-Q for the period ended
September 30, 2006, and in other securities filings by MSW I and MSW II.
Although Covanta and the Issuers believe that their plans, intentions
and expectations reflected in or suggested by such forward-looking
statements are reasonable, actual results could differ materially from a
projection or assumption in any of forward-looking statements. Covantas
and the Issuers future financial condition and results of operations, as
well as any forward- looking statements, are subject to change and inherent
risks and uncertainties. The forward-looking statements contained in this
prospectus supplement and related prospectus and registration statement are
made only as of the date hereof and neither Covanta nor the Issuers have
any obligation to update or revise any forward-looking statements whether
as a result of new information, subsequent events or otherwise, unless
otherwise required by law.
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