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Education Management Corporation Announces Expiration and Final Results of Private Debt Exchange Offer



  Education Management Corporation Announces Expiration and Final Results of
                         Private Debt Exchange Offer

PR Newswire

PITTSBURGH, March 4, 2013

PITTSBURGH, March 4, 2013 /PRNewswire/ -- Education Management Corporation
("Parent") (NASDAQ: EDMC) announced today the expiration and final results of
the previously announced private exchange offer (the "Exchange Offer") by its
indirect subsidiaries, Education Management LLC (the "Company") and Education
Management Finance Corp. (the "Co-Issuer" and, together with the Company, the
"Issuers"), to exchange their 8¾% Senior Notes due 2014 (the "Old Notes") for
(i) new Senior Cash Pay/PIK Notes due 2018 (the "New Notes") and (ii) cash.
The Exchange Offer expired at midnight, New York City time, on March 1, 2013
(the "Expiration Date").

As of the Expiration Date, $361,293,000 aggregate principal amount of the Old
Notes, representing approximately 96% of the outstanding Old Notes, were
validly tendered (and not validly withdrawn) in the Exchange Offer.

On the settlement date for the Exchange Offer, which the Issuers expect to be
March 5, 2013 (the "Settlement Date"), the Issuers will issue $200,821,063
aggregate principal amount of New Notes and pay cash consideration in the
aggregate of $168,723,478.34 in exchange for the Old Notes validly tendered
(and not validly withdrawn) and accepted in the Exchange Offer. This cash
consideration includes cash in lieu of any fractional amount of New Notes not
received as a result of rounding and accrued and unpaid interest in cash in
respect of exchanged Old Notes from the last applicable interest payment date
to, but not including, the Settlement Date.

Upon settlement of the Exchange Offer, the holders whose Old Notes are
exchanged pursuant to the Exchange Offer will receive, subject to terms and
conditions of the Exchange Offer (including, without limitation, minimum
denomination requirements), the following consideration payable for each
$1,000 principal amount of Old Notes accepted for exchange:

  o in the case of such Old Notes validly tendered (and not validly withdrawn)
    at or prior to 5:00 p.m., New York City time, on February 14, 2013 (the
    "Early Tender Deadline"), $555.84 principal amount of New Notes and
    $444.16 of cash; and
  o in the case of such Old Notes validly tendered after the Early Tender
    Deadline but before the Expiration Date, $555.84 principal amount of New
    Notes and $414.16 of cash.

The Exchange Offer was made upon the terms and subject to the conditions set
forth in the confidential Offering Circular dated February 1, 2013 and the
related letter of transmittal.

The New Notes will be issued by the Issuers and guaranteed by Parent and all
of the Company's existing direct and indirect domestic restricted
subsidiaries, other than any subsidiary that directly owns or operates a
school or has been formed for such purpose and has no material assets. Cash
interest on the New Notes will accrue at the rate of 15% per annum. For any
interest period after March 30, 2014 up to and including July 1, 2018,
interest in addition to the cash interest payable as described in the previous
sentence will be paid by increasing the principal amount of the outstanding
New Notes or by issuing additional New Notes ("PIK Interest"). PIK Interest on
the New Notes will accrue at a rate of (i) 1.0% per annum for the period from
March 30, 2014 through and including March 30, 2015, (ii) 2.0% per annum for
the period from March 30, 2015 through and including March 30, 2016, (iii)
3.0% per annum for the period from March 30, 2016 through and including March
30, 2017 and (iv) 4.0% per annum for the period from March 30, 2017 through
and including July 1, 2018.

The New Notes have not been registered under the Securities Act of 1933, as
amended (the "Securities Act") or any state securities laws. The New Notes may
not be offered or sold in the United States or to any U.S. persons except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.  The Exchange Offer was made,
and the New Notes were offered and will be issued only, to persons certifying
that (a) they are in the United States and are "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) or (b)(i) they are
outside the United States and are persons not U.S. persons, who are eligible
to acquire securities from the Issuers pursuant to Regulation S and would be
participating in any transaction in accordance with Regulation S and (ii) they
are "non-U.S. qualified offerees" (as defined in the Offering Circular). 

This press release is for informational purposes only.  This press release is
neither an offer to sell nor a solicitation of an offer to buy any New Notes
and is neither an offer to purchase nor a solicitation of an offer to sell any
Old Notes. 

This press release may include information that could constitute
forward-looking statements made pursuant to the safe harbor provision of the
Private Securities Litigation Reform Act of 1995. Any such forward-looking
statements may involve risk and uncertainties that could cause actual results
to differ materially from any future results encompassed within the
forward-looking statements. Factors that could cause or contribute to such
differences include those matters disclosed in Education Management
Corporation's Securities and Exchange Commission filings. Past results of
Education Management Corporation are not necessarily indicative of its future
results. Education Management Corporation does not undertake any obligation to
update any forward-looking statements.

For: Education Management Corporation
       Company Contact:
       John Iannone
       Director of Investor Relations
       (412) 995-7727

 

 

 

 

SOURCE Education Management Corporation
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