SANTA
ROSA, Calif., July 18,
2024 /PRNewswire/ -- Provident Funding Associates,
L.P. (the "Company") and PFG Finance Corp., a direct wholly-owned
subsidiary of the Company (the "Co-Issuer," and together with the
Company, the "Issuers"), today announced that they have commenced
(i) an offer to exchange (the "Exchange Offer") any and all of
their outstanding 6.375% Senior Notes due 2025 (the "Existing
Notes") for cash and for the Issuers' new 8.375% Senior Notes due
2027 (the "New Notes") and (ii) a solicitation of consents to
certain proposed amendments to the indenture governing the Existing
Notes (the "Consent Solicitation"), in each case, upon the terms
and subject to the conditions described in the Confidential
Offering Memorandum and Consent Solicitation Statement, dated
July 18, 2024 (the "Offering
Memorandum"). The primary purpose of the Exchange Offer is to
improve the Company's maturity profile by extending the maturity
date of the indebtedness represented by the Existing Notes from
June 2025 to January 2027.
The following table summarizes certain terms of the Exchange
Offer:
Title of
Security
|
CUSIP
Number/ISIN
|
Principal
Amount
Outstanding
|
Exchange
Consideration(1)
|
Early
Exchange
Premium(1)
|
Total
Exchange
Consideration(1)(2)
|
6.375%
Senior
Notes due
2025
|
CUSIP: 74387UAJ0
(144A) / U74337AD5
(Reg. S)
ISIN: US74387UAJ07
(144A) /
USU74337AD56
(Reg. S)
|
$209,831,000
|
$985 in principal
amount of New
Notes
|
$35 in cash and
$15 in principal
amount of New
Notes
|
$35 in cash
and $1,000 in
principal
amount of
New Notes
|
_____________
|
(1) For
each $1,000 principal amount of Existing Notes.
|
(2)
Includes Early Exchange Premium.
|
The New Notes will mature on January 15,
2027; provided that if any Existing Notes remain outstanding
on June 15, 2025, then the New Notes
will also mature on June 15, 2025.
The New Notes will bear interest at a rate per annum equal to
8.375%.
Prior to July 15, 2025, the New
Notes will be redeemable at the Issuers' option at a make-whole
price. On and after July 15, 2025,
the New Notes will be redeemable at the Issuers' option at the
redemption prices listed in the Offering Memorandum.
The New Notes will be the Issuers' senior obligations and any
future New Note guarantee would be the senior obligation of the
applicable guarantor. The New Notes and New Note guarantees, if
any, will be pari passu in right of payment to all of the
Issuers' and the guarantors' existing and future indebtedness that
is not subordinated and senior in right of payment to all of the
Issuers' and the guarantors' subordinated indebtedness. The New
Notes and New Note guarantees, if any, will be effectively
subordinated to all of the Issuers' and the guarantors' existing
and future secured indebtedness to the extent of the value of the
collateral securing such indebtedness. The New Notes and the New
Note guarantees, if any, will be structurally subordinated to all
existing and future liabilities, including trade payables, of each
of the Issuers' existing subsidiaries and each of the Issuers'
future subsidiaries that do not guarantee the New Notes. On the
Early Settlement Date and the Final Settlement Date (each as
defined below), there will be no guarantors. In the future, the
Issuers' obligations under the New Notes may be jointly and
severally and fully and unconditionally guaranteed on a senior
basis by certain of their future domestic subsidiaries, other than
special purpose vehicles and immaterial subsidiaries. In addition,
the covenants for the New Notes will be substantially consistent
with those of the Existing Notes.
The Exchange Offer and the Consent Solicitation will expire at
5:00 p.m., New York City time, on August 15, 2024, unless extended or earlier
terminated (such date and time, as they may be extended, the
"Expiration Date"). Eligible Holders (as defined below) must
validly tender their Existing Notes at or prior to 5:00 p.m., New York
City time, on July 31, 2024,
unless extended (such date and time, as they may be extended, the
"Early Exchange Date"), to be eligible to receive the "Total
Exchange Consideration" (as set forth above), which will be payable
in the forms described above and in the Offering Memorandum.
Eligible Holders tendering Existing Notes after the Early Exchange
Date and on or before the Expiration Date, and whose Existing Notes
are accepted in the Exchange Offer, will only be eligible to
receive the "Exchange Consideration" (as set forth above), which
will equal the Total Exchange Consideration minus the Early
Exchange Premium.
In addition to the Total Exchange Consideration or Exchange
Consideration, as applicable, Eligible Holders whose Existing Notes
are accepted for exchange will receive the accrued and unpaid
interest in cash, if any, to, but not including, the early
settlement date, which we expect will be on or around August 5, 2024, unless extended (the "Early
Settlement Date") or the final settlement date, which we expect
will be promptly following and within three business days of the
Expiration Date, unless extended (the "Final Settlement Date"), as
applicable, for such Existing Notes that are validly tendered and
accepted. Interest on the New Notes will accrue from (and
including) the Early Settlement Date. If New Notes are issued in
exchange for Existing Notes on the Final Settlement Date, such New
Notes will have an embedded entitlement to pre-issuance interest
for the period from (and including) the Early Settlement Date to
but excluding the Final Settlement Date (in order to preserve
fungibility with New Notes issued on the Early Settlement Date). As
a result, the cash payable for accrued interest on any Existing
Notes exchanged on the Final Settlement Date will be reduced by the
amount of any pre-issuance interest on the New Notes exchanged
therefor.
On the Early Settlement Date and the Final Settlement Date, we
will deposit with the Exchange Agent (as defined below) an amount
of cash sufficient to pay any cash amounts then due to exchanging
Eligible Holders (including the cash portion of the Total Exchange
Consideration, and any accrued interest on Existing Notes validly
tendered and accepted for exchange), and the New Notes will be
issued in exchange for any Existing Notes tendered for exchange and
accepted by us at the Early Settlement Date or the Final Settlement
Date in the amount and manner described in the Offering
Memorandum.
In conjunction with the Exchange Offer, the Issuers are
soliciting consents (the "Consents") from Eligible Holders of
Existing Notes to certain proposed amendments (the "Proposed
Amendments") to the indenture, dated as of June 8, 2017 (as amended, supplemented or
otherwise modified prior to the date of the Offering Memorandum,
the "Existing Notes Indenture"), by and among the Issuers, the
guarantors party thereto from time to time and Computershare Trust
Company, National Association (as successor in interest to Wells
Fargo Bank, National Association), as trustee, governing the
Existing Notes. If Consents are received from holders of at least
50.1% of the outstanding principal amount of Existing Notes that
are not affiliates of the Issuer, the Proposed Amendments will
eliminate substantially all of the restrictive covenants contained
in the Existing Notes Indenture and the Existing Notes, eliminate
certain events of default, modify covenants regarding mergers and
consolidations and modify or eliminate certain other provisions,
including certain provisions relating to future guarantors,
contained in the Existing Notes Indenture and the Existing Notes.
The completion of the Exchange Offer is not conditioned on any
minimum amount of Existing Notes being tendered or the completion
of the Consent Solicitation.
Tenders of Existing Notes may be validly withdrawn and Consents
may be revoked at any time at or prior to 5:00 p.m., New York
City time, on July 31, 2024
(as it may be extended, the "Withdrawal Deadline"), but will
thereafter be irrevocable, except in certain limited circumstances
where additional withdrawal rights are required by law. Subject to
applicable law, the Issuers may extend the Early Exchange Date or
Expiration Date, with or without extending the Withdrawal Deadline.
Tenders submitted in the Exchange Offer after the Withdrawal
Deadline will be irrevocable except in the limited circumstances
where additional withdrawal rights are required by law.
Holders may not tender their Existing Notes pursuant to the
Exchange Offer without delivering a Consent with respect to such
Existing Notes pursuant to the Consent Solicitation, and holders
may not deliver their Consents pursuant to the Consent Solicitation
without tendering the related Existing Notes pursuant to the
Exchange Offer. If holders tender their Existing Notes pursuant to
the Exchange Offer, they will be deemed to have given their Consent
to the Proposed Amendments pursuant to the Consent
Solicitation.
The Issuers may terminate the Exchange Offer and the Consent
Solicitation if the conditions specified in the Offering Memorandum
are not satisfied. Consummation of the Exchange Offer and the
Consent Solicitation is subject to the satisfaction or waiver of
certain conditions set forth in the Offering Memorandum. In the
event of a termination, the Exchange Offer will not be consummated,
the Proposed Amendments will not become effective, no Total
Exchange Consideration or Exchange Consideration will be paid, and
the Existing Notes tendered pursuant to the Exchange Offer will be
promptly returned to the tendering holders. The Exchange Offer
is not conditioned on any minimum amount of Existing Notes being
tendered for exchange or the completion of the Consent
Solicitation.
The Issuers reserves the right to extend, amend or terminate the
Exchange Offer and the Consent Solicitation for any reason or for
no reason at any time prior to the Expiration Date. The Issuers
will not receive any cash proceeds from the Exchange Offer.
The Exchange Offer is being made only to holders of Existing
Notes that have certified, by submitting an instruction to the
clearing system, that they are either (i) reasonably believed to be
"qualified institutional buyers" as defined in Rule 144A ("Rule
144A") under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) are located outside the United States and are not "U.S. persons"
as defined in Rule 902 under the Securities Act (such holders,
"Eligible Holders"). Only Eligible Holders are authorized to
receive or review the Offering Memorandum or to participate in the
Exchange Offer. Non U.S.-persons may also be subject to additional
eligibility criteria.
Information Relating to the Exchange Offer and the Consent
Solicitation
The complete terms and conditions of the Exchange Offer and the
Consent Solicitation are set forth in the Offering Memorandum. The
Offering Memorandum contains important information, and Eligible
Holders are encouraged to read it in its entirety. The Offering
Memorandum will only be distributed to Eligible Holders who
complete and return an eligibility form confirming that they are
either a "qualified institutional buyer" under Rule 144A or not a
"U.S. person" under Regulation S under the Securities Act for
purposes of applicable securities laws.
Holders of Existing Notes who desire to complete an eligibility
form should either visit www.dfking.com/provident or request
instructions by sending an e-mail to provident@dfking.com or by
calling D.F. King & Co., Inc., the information (the
"Information Agent") and exchange agent (the "Exchange Agent") for
the Exchange Offer, at (toll-free) (800) 769-7666 (toll-free) or
(banks and brokers) (212) 269-5550.
None of the Issuers, their affiliates, their respective boards
of directors and stockholders, the dealer manager for the Exchange
Offer, the Information Agent, Exchange Agent or Computershare Trust
Company, National Association, as trustee for the Existing Notes
and New Notes, are making any recommendation as to whether holders
should tender any Existing Notes in response to the Exchange Offer
and the Consent Solicitation. Holders must make their own decision
as to whether to tender any of their Existing Notes, and, if so,
the principal amount of Existing Notes to tender.
This press release is for informational purposes only and is
neither an offer to buy nor a solicitation of an offer to sell any
of the Existing Notes, the New Notes or any other securities. The
Exchange Offer and the Consent Solicitation are not being made to
holders of Existing Notes in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. The
Exchange Offer and the Consent Solicitation are only being made
pursuant to the Offering Memorandum. Eligible Holders are strongly
encouraged to read the Offering Memorandum carefully because it
will contain important information.
The New Notes have not been and will not be registered under the
Securities Act or any other applicable securities laws and may not
be offered or sold in the United
States or to or for the account of any U.S. person absent
registration or an applicable exemption from the registration
requirements. Non U.S.-persons may also be subject to additional
eligibility criteria. The New Notes have not been approved or
disapproved by any regulatory authority, nor has any such authority
passed upon the accuracy or adequacy of the Offering
Memorandum.
Forward-Looking Statements
This release contains statements that constitute forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 and Section 27A of the Securities
Act. Many of the forward-looking statements contained in this
release can be identified by the use of forward-looking words such
as "anticipate," "believe," "could," "expect," "should," "plan,"
"intend," "estimate" and "potential," among others. The
forward-looking statements are based upon management's views and
assumptions as of the date of this Offering Memorandum regarding
future events and operating performance and are applicable only as
of the dates of such statements. By their nature, all
forward-looking statements involve risk and uncertainties including
as it relates to our ability to predict our future operating and
financial performance. Actual results may differ materially from
those contemplated by the forward-looking statements for a number
of reasons, including, but not limited to, those addressed in "Risk
Factors" and "Statements Regarding Forward-Looking Information"
sections of the Offering Memorandum. You should not place undue
reliance on forward-looking statements. Forward-looking statements
speak only as of the date they are made, and we undertake no
obligation to update them publicly or to revise them in light of
new information or future events.
About the Issuers
The Company is a California
limited partnership and a leading private, independent mortgage
company that originates and services residential mortgage loans.
The Co-Issuer was formed on March 15,
2010, as a California
corporation, to act as co-issuer of the Company's debt
securities.
Investor Contacts:
Christopher Austin
Controller, SVP
(650) 259-7413
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SOURCE Provident Funding Associates, L.P.