(Source: Business Wire)Unisys Corporation ("Unisys" or the "Company") (NYSE: UIS) announced today that it has commenced private exchange offers and consent solicitations in respect of its 6 7/8% Senior Notes due 2010 (the "2010 Notes"), 8% Senior Notes due 2012 (the "2012 Notes"), 8½% Senior Notes due 2015 (the "2015 Notes") and 12½% Senior Notes due 2016 (the "2016 Notes" and, collectively with the 2010 Notes, 2012 Notes and 2015 Notes, the "Senior Notes"). The Company also announced that its previously announced private offer to exchange a portion of the Senior Notes and its concurrent notes offering have been terminated. All tendered Senior Notes, and any subscription fees submitted, in the terminated transaction will be promptly returned to holders.

The Company has commenced private offers to exchange its outstanding Senior Notes in private placements for new 12¾% Senior Secured Notes due 2014 to be issued by the Company (the "First Lien Notes"), new 14¼% Senior Secured Notes due 2015 to be issued by the Company (the "Second Lien Notes" and, together with First Lien Notes, the "New Secured Notes"), up to the lesser of (i) 73,697,327 shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), and (ii) 19.9% of the number of shares of Common Stock outstanding (excluding treasury shares) on the date the transaction closes, and up to $30.0 million in cash, as set forth in the table below. The Company has negotiated the terms of the exchange offers with representatives of an ad hoc bondholder group that, the Company has been advised, is comprised of investors holding approximately 40% of the Senior Notes in the aggregate. Members of the group who hold approximately 25.6%, 23.8%, 54.0% and 15.8% of the outstanding aggregate principal amount of 2010 Notes, 2012 Notes, 2015 Notes and 2016 Notes, respectively, have contractually committed to tender and not withdraw their Senior Notes in the exchange offers and to deliver their consents in favor of the proposed amendments of the indentures governing the Senior Notes.

In conjunction with the exchange offers, the Company is also soliciting consents from holders of the Senior Notes to certain proposed amendments (the "Proposed Amendments") to the indentures under which the Senior Notes were issued, which, if effected, would eliminate substantially all of the restrictive covenants and certain events of default in those indentures. A tender of Senior Notes by any holder in the exchange offers will also constitute a consent by such holder in favor of the Proposed Amendments. The holders of each series of Senior Notes will vote as a separate class, and Proposed Amendments will be effected with respect to a series if consents of holders of at least a majority in principal amount of that series of Senior Notes are obtained. If the Proposed Amendments are adopted by the 2010 Notes, the 2012 Notes and the 2015 Notes, each voting as a separate class, the Company's U.S. real estate and the stock and indebtedness of its domestic operating subsidiaries will be included as collateral for the New Secured Notes. The exchange offers are not conditioned upon obtaining the consents from holders of any series of Senior Notes.

The New Secured Notes will be guaranteed by Unisys Holding Corporation, a wholly-owned Delaware corporation that directly or indirectly holds the shares of substantially all of the Company's foreign subsidiaries, and by the Company's other current and future material U.S. subsidiaries. The First Lien Notes and Second Lien Notes will be secured by first-priority liens and second-priority liens, respectively, (in each case, subject to permitted prior liens) by substantially all of the Company's assets, except (i) accounts receivable that are subject to one or more receivables facilities, (ii) real estate and the stock or indebtedness of its U.S. operating subsidiaries (unless the Proposed Amendments are adopted by the 2010 Notes, the 2012 Notes and the 2015 Notes, each voting as a separate class, in which case U.S. real estate and the stock and indebtedness of the Company's domestic operating subsidiaries will be included in such liens), (iii) cash or cash equivalents securing reimbursement obligations under letters of credit or surety bonds and (iv) certain other excluded assets.

The table below lists the series of Senior Notes that are the subject of the exchange offers and consent solicitations and summarizes the economic terms of the exchange offers. No separate consideration will be paid for the consents.

 Exception caught in main. 

* If more than $150.0 million aggregate principal amount of 2010 Notes are tendered prior to the Early Tender Date (defined below) and are accepted for exchange, holders of such 2010 Notes will receive a pro rata share of $30.0 million of cash and will be issued additional principal amount of First Lien Notes in lieu of cash in excess of such pro rata share.

**If more than approximately $161.1 million aggregate principal amount of 2012 Notes are tendered prior to the Early Tender Date and are accepted for exchange, holders of such 2012 Notes will receive a pro rata share of $145.0 million aggregate principal amount of First Lien Notes and will be issued Second Lien Notes in lieu of First Lien Notes in excess of such pro rata share.