Automotive News - November 10, 2008 - (Page 29) NOVEMBER 10, 2008 • 29 Metaldyne offers pennies to bondholders Robert Sherefkin rsherefkin@crain.com DETROIT — Metaldyne Corp. raised the stakes in its bid to buy back $392.2 million worth of debt from bondholders at 30 cents or less on the dollar. Now the driveline parts supplier says it will skip the next interest payment on those bonds. On Monday, Nov. 3, the suburban Detroit supplier acknowledged that failing to pay the Nov. 1 interest payment on those bonds would constitute a default on all $392.2 million. Such a default would come after a 30day grace period expiring Dec. 2. When Metaldyne made the tender offer for its outstanding bonds on Oct. 31, bondholders also were asked to approve a potential prepackaged bankruptcy filing. Metaldyne, owned by Asahi Tec Corp., of Shizuoka, Japan, said it would consider a prepackaged bankruptcy filing only if bondholders fail to tender 95 percent of the bonds. Metaldyne’s move to withhold an interest payment on the bonds indicates the seriousness of the supplier’s efforts, says turnaround specialist John Groustra, of Conway MacKenzie & Dunleavy in suburban Detroit. “But for sophisticated holders of these bonds, this would not be unex- pected,” Groustra said. After the tender offer, Standard & Poor’s Ratings Services dropped its corporate credit rating on Metaldyne to CC from CCC+ — deep into junk territory. The ratings outlook is negative. “We consider the offer to be a distressed exchange and, as such, tantamount to a default,” S&P said. In a statement, Metaldyne CFO Terry Iwasaki said that “no additional payment of interest will be made in respect of bonds tendered and accepted for payment.” Bondholders have between Wednesday, Nov. 12, and Nov. 26 to tender their bonds. “Metaldyne was able to raise capital in a financial market where capital is nearly unavailable to many companies, not just automotive suppliers,” Metaldyne CEO Thomas Amato told Automotive News. “That makes this a very unique opportunity and transaction and one that will create a lot of interest by our bondholders as well as all of our stakeholders.” If bondholders sell, Asahi Tec and its largest shareholder, plus several of Metaldyne’s customers, have agreed to hand over $110 million. Of that, $65 million will be used to buy back the bonds. The remaining $45 mil- lion will be used for general operating expenses, Metaldyne says. Metaldyne customers Chrysler LLC, Ford Motor Co. and General Motors have agreed to provide a total of $60 million, according to S&P. There are two bonds outstanding, due in 2012 and 2013. Bondholders who agree to sell by Nov. 12 will get 10.63 cents on the dollar for the 2012 bonds and 27.018 cents for the 2013 bonds. If bondholders don’t act by Nov. 12, Metaldyne will offer to pay 10.13 cents on the dollar for the 2012 bonds and 26.518 cents for the 2013 bonds. c CHRYSLER LLC — Kim Harris Jones, 48, senior vice president, corporate controller and auditor, has received the Women of Color Harris Jones Professional Achievement in Industry Award from Women of Color magazine. The award recognizes professional achievement and leadership. SERVICE REPAIR SOLUTIONS INC. — James D. Power IV, 45, to the board of directors. He is senior vice president and strategic adviser at J.D. Power and Associates Inc. Service Repair Solutions, of Las Vegas, provides diagnostic information technology and other products. Power Its subsidiaries are Mobile Productivity Inc., Identifix Inc. and International Automotive Technicians’ Network Inc. E-mail personnel news to: autonews@crain.com Or send it to: Deputy Managing Editor Automotive News 1155 Gratiot Ave. Detroit, MI 48207-2997 Please include the employee’s birthdate, new title, most recent title and the full name and location of company. obituaries Hap Hirsh PORT CHARLOTTE, Fla. — Former rustproofing executive Hap Hirsh died here Sept. 19 at age 73. He was founder and chairman of Thermo-Guard Inc., which distributed rustproofing to auto dealers in the 1980s. The company closed in 1989. Hirsh later helped sign up dealers for Malcolm Bricklin’s Electric Bicycle Co. That business failed in 1997. http://www.protective.com/dealershipservices http://www.protective.com/dealershipservices
Table of Contents Feed for the Digital Edition of Automotive News - November 10, 2008 Life at 11 million: Slash, rethink The options: Bailout or disaster Can Toyota reheat the frozen Tundra? Chrysler dealers cheer halt to merger talk VW will unveil roadster at Detroit auto show BMW boosts dealers' year-end ad money Mercedes' $220 million flagship Mercedes hit hard in Northeast, once a sales stronghold Mercedes will kill CLK, add larger coupe, convertible Mitsubishi reclaims its finance business Toyota's Esmond to speak at congress Loss is more: Europe snatches bigger share of U.S. market Cash burn rates threaten GM, Ford GMAC: We're nobody's captive As losses mount, suppliers risk cash-flow crunch Tata: Yes to Jaguar XF derivative, no to SUV U.S. aid is needed now, but not to help Cerberus They are too big to fail Why should we help GM and Chrysler? First and foremost, you must be flexible U.S. trade policy gives it all away To the Editor: A rough ride is nothing new for autos Dealer's politics were pertinent Chrysler's 1st electric: Probably a cargo van Auto meltdown forces Mercedes to scrap prediction of sales record Boosting mpg will bump up stickers, too Adding up the tab for fuel economy Camaro Black: Eye-catching, affordable and available Honda sees green in Civic HFP's street performance Honda offers peek at future Fit Ford F-150 Raptor flies off-road Souped-up, tricked-out â and headed for the showroom Report: Toyota plans $5,000 car Amid gloom, Mazda chief sees revival in 2009-10 Report: Past-due subprime loans jump Toyota aims to win loyalty with credit card Study: Car buyers turn green for different reasons Thanks, buddy Hyundai helps Dealers Metaldyne offers pennies to bondholders Obituaries Personnel As expected, Oct. sales sank Another Chinese automaker plans Mexico factory Honda backs off U.S. clean diesels Industry pal, foe vie for key post in Congress Industry expects more activism from D.C. N.A. output falls 19.9% Toyota moves in striking distance of GM's U.S. sales crown Going, going . . . An ex-GM exec's view: It's going to get nasty Sex, Nazis, chicken and BMW: A scandal that puts fiction writers to shame Recession rips up roadster market Toyota takes heat for 'the herpes of the advertising world' Want to boost mpg? Turn up the heat on AC Cutting energy loss: A nibble here, a nibble there ... Carbon slashes weight, but it's still too pricey Carmakers shift to gears in search of mpg gains Natural gas draws interest as alternative fuel Friction? Ay, there's the rub Electric for a week Automotive News - November 10, 2008 Automotive News - November 10, 2008 - (Page Intro) Automotive News - November 10, 2008 - (Page Bellyband1) Automotive News - November 10, 2008 - (Page Bellyband2) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 1) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 2) Automotive News - November 10, 2008 - VW will unveil roadster at Detroit auto show (Page 3) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 4) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 5) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 6) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 7) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 8) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 9) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 10) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 11) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 12) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 13) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 14) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 15) Automotive News - November 10, 2008 - Auto meltdown forces Mercedes to scrap prediction of sales record (Page 16) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 17) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 18) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 19) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 20) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 21) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22a) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22b) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22c) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22d) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22e) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22f) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22g) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22h) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22i) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22j) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22k) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22l) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 23) Automotive News - November 10, 2008 - Souped-up, tricked-out â and headed for the showroom (Page 24) Automotive News - November 10, 2008 - Amid gloom, Mazda chief sees revival in 2009-10 (Page 25) Automotive News - November 10, 2008 - Toyota aims to win loyalty with credit card (Page 26) Automotive News - November 10, 2008 - Hyundai helps (Page 27) Automotive News - November 10, 2008 - Dealers (Page 28) Automotive News - November 10, 2008 - Personnel (Page 29) Automotive News - November 10, 2008 - Personnel (Page 30) Automotive News - November 10, 2008 - Personnel (Page 31) Automotive News - November 10, 2008 - Personnel (Page 32) Automotive News - November 10, 2008 - Personnel (Page 33) Automotive News - November 10, 2008 - Personnel (Page 34) Automotive News - November 10, 2008 - Personnel (Page 35) Automotive News - November 10, 2008 - Personnel (Page 36) Automotive News - November 10, 2008 - As expected, Oct. sales sank (Page 37) Automotive News - November 10, 2008 - Honda backs off U.S. clean diesels (Page 38) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 39) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 40) Automotive News - November 10, 2008 - N.A. output falls 19.9% (Page 41) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 42) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 43) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 44)
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