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Kodak makes debt moves

Eastman Kodak Co. said Wednesday it plans to issue $400 million in senior debt to repurchase debt it issued early last fall.

Kodak (NYSE: EK) plans to offer the senior secured notes in a private placement to qualified institutional buyers. Final terms, including the interest rate, will be determined through negotiations between Kodak and the initial purchasers of the notes, the company said.

Kodak plans to use the net proceeds from the offering to repurchase all $300 million of its 10.5 percent senior notes due 2017 and to repurchase a portion of its 7.25 percent senior notes due 2013 through a tender offer.

Kodak Wednesday also announced an agreement with affiliates of Kohlberg Kravis Roberts & Co. L.P., to repurchase the $300 million of 10.5 percent secured notes due 2017 previously issued to KKR.

Kodak’s decision to repurchase the senior secured notes is contingent on the satisfaction or waiver of certain conditions and the sale of at least $300 million aggregate principal amount of debt securities.

The repurchase of the notes from KKR, together with Kodak’s previously announced tender for up to $100 million aggregate principal amount of 7.25 percent senior notes, will extend the maturity of Kodak’s debt, and is expected to increase Kodak’s financial flexibility, company officials said.

KKR continues to hold warrants to purchase 40 million shares of Kodak common stock, which are non-transferable until September 2011. Two executives from KKR will continue to serve on Kodak’s board, subsequent to the notes repurchase.

Kodak shares rose 2.7 percent to $5.75 midday Wednesday.

(c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail [email protected].


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