Spectrum Brands

Spectrum Brands Files for Bankruptcy (Summary)

            Spectrum Brands and its U.S. subsidiaries today filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court. Spectrum also announced it has reached agreements with noteholders representing approximately 70% of the face value of its outstanding bonds.

            According to BusinessWeek, The refinancing is provided for in the plan to significantly reduce the Company’s debt through the cancellation of existing bond obligations in a principal amount of $1.05 billion and the issuance to the noteholders of new bonds in an aggregate principal amount equal to 20% of the total unpaid principal and interest on existing bonds together with shares of new common stock to be created under the plan. Existing common stock will be extinguished under the plan, and no distributions will be made to holders of the current equity. On February 2, 2009, Spectrum Brands failed to make a $25.8 million interest payment.

            Spectrum Brands has received commitments for $235 million in debtor-in-possession financing.

Related Links and Sources

• Spectrum Brands Reaches Agreement with Noteholders to Significantly Reduce Outstanding Debt
• Spectrum Brands, Battery Maker, Seeks Bankruptcy

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