CEVA Group Plc announced today that, as part of a proposed refinancing, it has commenced cash tender offers and consent solicitations for any and all of the approximately $562 million aggregate principal amount of its outstanding 8.375% Senior Secured Notes due 2017 (the “8.375% Notes”), approximately $210 million aggregate principal amount of its outstanding 11.625% Senior Secured Notes due 2016 (the “11.625% Notes” and, together with the 8.375% Notes, the “Existing Secured Notes”) and approximately $12 million aggregate principal amount of its outstanding 11.5% Junior Priority Senior Secured Notes due 2018, which became unsecured on May 2, 2013 (the “Unsecured Notes” and, together with the Existing Secured Notes, the “Notes”), at the prices set forth in the table below.
1 For each $1,000 principal amount of Notes that are accepted for purchase, excluding accrued but unpaid interest thereon, which will be paid in addition to the Tender Offer Consideration (as defined below) or the Total Consideration (as defined below), as applicable, up to but not including the applicable payment date.
2 For each $1,000 principal amount of Notes tendered prior to the Consent Date (as defined below) that are accepted for purchase.
Each holder who validly tenders its Notes and delivers consents to the proposed amendments (the “Proposed Amendments”) described below prior to 5:00 pm, New York City time, on 17 March 2014 (the “Consent Date”) shall be entitled to a consent payment, which is included in the total consideration set forth in the table above (the “Total Consideration”) if such Notes are accepted for purchase pursuant to the tender offers. Each holder who validly tenders its Notes after the Consent Date but prior to the Expiration Date (as defined below) will be eligible to receive the tender offer consideration, which is equal to the Total Consideration less the consent payment (the “Tender Offer Consideration”). The tender offers will expire at midnight, New York City time, on 31 March 2014 (the “Expiration Date”), unless extended or earlier terminated. Tendered Notes may be withdrawn and consents may be revoked at any time prior to the Consent Date but not thereafter.
CEVA reserves the right, at any time or times following the Consent Date but prior to the Expiration Date, to accept for purchase all of any series of the Notes (each such time, the “Early Acceptance Time”) validly tendered prior to the Early Acceptance Time. If CEVA exercises this option, it will pay the Total Consideration for the applicable series of Notes accepted for purchase at the Early Acceptance Time on a date (each such date, the “Early Payment Date”) promptly following the Early Acceptance Time. CEVA will also pay on the Early Payment Date accrued and unpaid interest up to, but not including, the Early Payment Date on the Notes accepted for purchase at the Early Acceptance Time. CEVA currently expects that the Early Payment Date will be 19 March 2014.
Subject to the terms and conditions of the tender offer and consent solicitation, CEVA will, following the Expiration Date, accept for purchase all of any series of the Notes (each such time, the “Final Acceptance Time”) validly tendered prior to the Expiration Date (or if CEVA has exercised its early purchase option described above, all of the applicable series of Notes validly tendered after the Early Acceptance Time and prior to the Expiration Date). CEVA will pay the applicable Total Consideration or Tender Offer Consideration, as the case may be, for the Notes accepted for purchase at the Final Acceptance Time on a date (each such date, the “Final Payment Date”) promptly following the Final Acceptance Time. CEVA will also pay on the Final Payment Date accrued and unpaid interest up to, but not including, the Final Payment Date on the Notes accepted for purchase at the Final Acceptance Time. CEVA currently expects that the Final Payment Date will be 2 April 2014.
The tender offers are expected to be financed with (i) the proceeds from the issuance of approximately $400 million principal amount of new first priority senior secured notes and approximately $425 million principal amount of new first-and-a-half priority senior secured notes (collectively the “New Notes”) having a later maturity than the maturity of the Notes and/or (ii) the proceeds from the refinancing of CEVA’s senior secured credit facilities (together with the New Notes, the “New Debt”), which new senior secured credit facilities will include a $600 million term loan facility as well as a revolving credit facility and a synthetic letter of credit facility. However, the terms and amounts of such New Debt will be subject to change based on market conditions. The purpose of the tender offers and consent solicitations is to refinance certain of CEVA’s debt.
In conjunction with the tender offers, CEVA is also soliciting consents (1) from holders of the Existing Secured Notes to the adoption of Proposed Amendments to each of the indentures governing the Existing Secured Notes and related security documents to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the indentures, provide for the release of all of the liens on the collateral securing the Existing Secured Notes and reduce from 30 days to three business days the minimum notice period for optional redemptions under such indentures and (2) from holders of the Unsecured Notes to the adoption of Proposed Amendments to the indenture governing the Unsecured Notes to reduce from 30 days to three business days the minimum notice period for optional redemptions under such indenture. Adoption of the Proposed Amendments with respect to the Existing Secured Notes and the Unsecured Notes requires consents from the holders of at least a majority of the outstanding aggregate principal amount of each such series of Notes, except that the Proposed Amendments with respect to the Existing Secured Notes related to the release of all of the liens on the collateral securing such Notes require consents from the holders of at least 90% of the outstanding aggregate principal amount of such series of Existing Secured Notes.
The consummation of the tender offers and consent solicitations is conditioned upon, among other things, (i) the receipt of the proceeds from the issuance of an aggregate principal amount of New Debt acceptable to CEVA in its sole discretion to permit the closing of the tender offers and consent solicitations and the redemption of any Notes that may remain outstanding after the Expiration Date, (ii) the receipt of the consents of holders of at least a majority of the outstanding aggregate principal amount of each series of Notes to the applicable Propose Amendments and (iii) the execution of the supplemental indentures giving effect to the Proposed Amendments with respect to the Notes. If any of the conditions are not satisfied, CEVA may terminate the tender offers and consent solicitations and return tendered Notes. CEVA has the right to waive any of the foregoing conditions with respect to any series of Notes and to consummate any or all of the tender offers and consent solicitations. CEVA also has the right, in its sole discretion, to terminate the tender offers and/or the consent solicitations at any time, subject to applicable law. None of the tender offers is conditioned upon or subject to the completion of any other tender offer. Full details of the terms and conditions of the tender offers and consent solicitations are included in the Offer to Purchase and Consent Solicitation Statement dated 4 March 2014 and related materials (the “Tender Offer Documents”).
None of CEVA, the dealer manager and solicitation agent, the tender agent or any other person makes any recommendation as to whether holders should tender their Notes or provide the related consents, and no one has been authorized to make such a recommendation. Holders of Notes must make their own decisions as to whether to tender their Notes and provide the related consents, and if they so decide, the principal amount of the Notes to tender.
Credit Suisse Securities (USA), LLC will act as dealer manager and solicitation agent for the tender offers and consent solicitations. Questions regarding the tender offers or consent solicitations may be directed to Credit Suisse at (212) 538-2147 (Collect) or (800) 820-1653 (Toll Free). Holders who desire a copy of the Tender Offer Documents should contact the tender agent, D.F. King & Co., Inc., at (800) 714-3312 (Toll-Free) or (212) 269-5550 (Collect).
This announcement shall not constitute an offer to purchase or a solicitation of an offer to sell any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful and is not, and shall not constitute, an offer, solicitation or solicitation of any offer to purchase of any securities. The tender offers and consent solicitations are being made only through and subject to the terms and conditions set forth in the Tender Offer Documents. Holders of the Notes should read carefully the Tender Offer Documents before making any decision with respect to the tender offers and consent solicitations. Tender Offer Documents are being distributed to holders of Notes. The tender offers and consent solicitations are not being made to holders of 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.
