EX-99.C 5 c28573_ex-c.txt Exhibit C PRELIMINARY DRAFT MANAGEMENT PRESENTATION TO THE [LOGO] HERCULES -------------------------------------------------------------------------------- BOARD OF DIRECTORS 11-FEB-2002 PRELIMINARY DRAFT II. OVERVIEW OF REFINANCING -------------------------------------------------------------------------------- Overview of Refinancing 16 PRELIMINARY DRAFT CONSOLIDATED DEBT POSITION ACTUAL AND PRO FORMA FOR IMMEDIATE DEBT RESTRUCTURING OF $800MM (US$ IN MILLIONS) -------------------------------------------------------------------------------- AS OF DECEMBER 31, 2001 -------------------------- ACTUAL PRO FORMA 1 ================================================================================ Bank Debt Tranche A $ 494 $ 0 -------------------------------------------------------------------------------- Bank Debt Tranche D 371 371 -------------------------------------------------------------------------------- New Bank Debt Tranche E -- 400 -------------------------------------------------------------------------------- Bank Revolver 566 280 -------------------------------------------------------------------------------- $1,431 $1,051 -------------------------------------------------------------------------------- 11.125% Senior Notes Due 2007 400 400 -------------------------------------------------------------------------------- New Senior Notes Due 2009 -- 400 -------------------------------------------------------------------------------- 6.625% Senior Notes Due 2003 125 125 -------------------------------------------------------------------------------- 6.60% Debentures Due 2027 100 100 -------------------------------------------------------------------------------- $ 625 $1,025 -------------------------------------------------------------------------------- FiberVision Debt 58 58 -------------------------------------------------------------------------------- ESOP 84 84 -------------------------------------------------------------------------------- Sundry Bank Debt 15 15 -------------------------------------------------------------------------------- 8% Convertible Debenture 2010 3 3 -------------------------------------------------------------------------------- $ 160 $ 160 -------------------------------------------------------------------------------- $2,216 $2,236 -------------------------------------------------------------------------------- Trust Preferred Retail Issue 2029 363 363 -------------------------------------------------------------------------------- Convertible Trust Preferred 2029 261 261 -------------------------------------------------------------------------------- $ 624 $ 624 -------------------------------------------------------------------------------- TOTAL DEBT AND PREFERRED $2,840 $2,860 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Overview of Refinancing 17 PRELIMINARY DRAFT INDICATIVE TERM SHEET $400MM SENIOR UNSECURED NOTES -------------------------------------------------------------------------------- Borrower: Hercules Incorporated Lead Arranger: [REDACTED] Co-Arrangers: [REDACTED] Distribution: 144A with Registration Rights Estimated Pricing: +-10.5% Maturity: 7 Years No Call 4 Covenants: Similar to Existing Senior Notes Use of Proceeds: Repayment of Tranche A Bank Debt & Irrevocable Reduction of Revolving Credit Facility NOTE: ASSUMES CURRENT CREDIT RATINGS OF HERCULES REMAIN CONSTANT THROUGH REFINANCING -------------------------------------------------------------------------------- Overview of Refinancing 22 PRELIMINARY DRAFT INDICATIVE TERM SHEET $400MM (UNDERWRITTEN) INSTITUTIONAL LOAN TRANCHE E -------------------------------------------------------------------------------- Borrower: Hercules Incorporated Lead Arranger: [REDACTED] Estimated Pricing: LIBOR + 375 bps Maturity: February 2006 Call Premium: 101 First Year Guarantors: Same as Existing Agreement Collateral: Same as Existing Agreement Amortization: Minimal Covenants Reps. & Warranties: Same as (to be amended) Existing Agreement Use of Proceeds: Repayment of Tranche A Bank Debt Conditions Precedent: 1) Issuance of $350MM Senior Unsecured Notes 2) Deflection of Term Loan D Prepayment NOTE: ASSUMES CURRENT CREDIT RATINGS OF HERCULES REMAIN CONSTANT THROUGH REFINANCING -------------------------------------------------------------------------------- Overview of Refinancing 23 PRELIMINARY DRAFT PROPOSED CHANGES TO BANK DEBT COVENANTS -------------------------------------------------------------------------------- o Leverage covenants set at 5.5x for year 1, decreasing 0.25x per quarter thereafter to 4.0x o Interest coverage permanently lowered to 1.75x o $125mm restructuring carve-out allowance o Change use of proceeds to reflect Tranche D paydown o Allow future refinancings o Increase pricing grid for revolver and Tranche D o Amendment fee o Limit on capital expenditures -------------------------------------------------------------------------------- Overview of Refinancing 24