On September 28, 2004, Pioneer and Evergreen completed a $2.1 billion merger in which Evergreen became a wholly-owned subsidiary of Pioneer. As a result of that merger, a Change of Control (as defined in the Indenture) of Evergreen has occurred. Also, as a result of subsequent mergers involving Pioneer and certain of its subsidiaries (including Evergreen), Pioneer became the successor to Evergreen as the sole obligor under the Indenture and the Notes. The Notes are now general unsecured obligations of Pioneer that are subordinated to its existing and future senior debt.
Pursuant to the Indenture, when a Change of Control occurs, each holder of the Notes has the right to require Pioneer (as successor to Evergreen) to repurchase any or all of that holder's Notes. In accordance with the Indenture, Pioneer is offering to purchase any or all Notes (in principal amounts of $1,000 or an integral multiple thereof) at a purchase price in cash equal to 101% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest (if any) up to, but not including, the date of purchase.
In addition to the Change of Control Offer, Pioneer is soliciting consents to amendments to the Indenture. The proposed amendments will:
Approval of the Proposed Amendments will require the consent of a majority in outstanding principal amount of the Notes. The Consent Solicitation expires at 5:00 p.m., New York City time, on Friday, October 29, 2004, unless extended by Pioneer at its sole discretion.
Pioneer believes that the holders of the Notes will benefit from the elimination of the subordination provisions provided in the proposed amendments, if they are approved. Elimination of the subordination provisions of the Notes will result in the Notes' ranking equally in right of payment with Pioneer's existing and future unsecured senior debt as well as ranking senior in right of payment to all future subordinated debt of Pioneer. The Notes currently do not have an investment grade rating primarily because they are subordinated to Pioneer's senior debt. At October 1, 2004, Pioneer's publicly-traded senior notes were rated Baa3 by Moody's Investors Services, Inc. and BBB- by Standard & Poor's Ratings Group, Inc., both of which are considered investment grade ratings. If the subordination provisions of the Notes are eliminated, the Notes are expected to receive the same ratings that Pioneer's publicly-traded senior notes have at that time. If those ratings continue to be investment grade at that time, it is expected that the Notes would experience an increase in trading price. The ratings and trading prices of the Notes will depend on many factors, including our financial condition and results of operations and general market and economic conditions. No assurance can be given that the Notes will receive investment grade ratings if the proposed amendments are adopted or that the market price of the Notes will increase.
The Change of Control Offer and Consent Solicitation are not dependent on each other. Holders of the Notes may tender their Notes in the Change of Control Offer without also delivering their consent in the Consent Solicitation, or holders may deliver their consent in the Consent Solicitation without tendering their Notes in the Change of Control Offer, or they may both tender the Notes and deliver consent, or take neither action.
The terms of the Change of Control Offer and Consent Solicitation are described in the Notice of Change of Control, Offer to Purchase, and Consent Solicitation Statement of Pioneer, dated as of October 12, 2004 (the "Notice"). Wachovia Bank, National Association is the exchange agent for the Change of Control Offer and tabulation agent for the Consent Solicitation. D.F. King & Co., Inc. is the information agent for the Change of Control Offer and Consent Solicitation. Credit Suisse First Boston LLC is Pioneer's financial advisor for the Consent Solicitation.
Requests for copies of the Notice and questions regarding the Change of Control Offer and Consent Solicitation may be directed to Wachovia Bank, National Association at (704) 590-7413; to D.F. King & Co., Inc. at (212) 269-5550; or to Pioneer at (972) 444-9001. Holders of the Notes may also contact Credit Suisse First Boston LLC at (800) 820-1653 (US toll-free) with questions regarding the Consent Solicitation.
This announcement is not an offer to purchase or a solicitation of consent with respect to any securities. The Change of Control Offer and Consent Solicitation will be made solely by the Notice.
If the Consent Solicitation would constitute the offer of a new security, Pioneer is making the Consent Solicitation in reliance on the exemption from the registration requirements of the Securities Act of 1933 afforded by Section 3(a)(9) thereof.
Most Popular Articles