Unisys Announces Tender Offer and Consent Solicitation for 11 3/4% Notes; Company continues transformation of capital structure

Business Wire, May 22, 2001

Business Editors/Hi-Tech Writers

BLUE BELL, Pa.--(BUSINESS WIRE)--May 22, 2001

Continuing its progress in strengthening its capital structure and reducing interest expense, Unisys Corporation (NYSE:UIS) announced today that it has commenced a cash tender offer and consent solicitation for all of its $334 million outstanding 11 3/4% senior notes due in 2004.

In conjunction with the tender offer, the company is soliciting holders to consent to certain proposed amendments to the indenture governing the notes. Unisys plans to finance this tender offer primarily with the proceeds from its offering of $350 million 8 1/8% senior notes due in 2006, which was completed last week.

"Over the past four years, we have moved step by step to transform this company's financial structure by removing a historically high burden of debt and preferred stock," said Unisys Chairman and CEO Lawrence A. Weinbach. "We are pleased that the note offering we completed last week allows us to make this tender offer for the 11 3/4% notes prior to the initial call date of October 15, 2001. With the elimination of this last piece of high-coupon debt, we will go forward with a high-quality financial structure that greatly enhances our competitive position in the marketplace."

Unisys said that it will take an estimated after-tax extraordinary charge in the second quarter of approximately $17 million for the premium paid for the notes and unamortized debt expense, assuming all of the notes are tendered.

The tender offer will expire at 5 p.m., New York City time, on Wednesday, June 20, 2001 (the "Expiration Date"). The consent solicitation will expire at 5:00 p.m., New York City time, on June 5, 2001 (the "Consent Date"). Holders tendering their notes will be required to consent to certain proposed amendments to the indenture governing the notes, which will eliminate certain covenants. Holders may not tender their notes without delivering consents or deliver consents without tendering their notes.

Holders who validly tender their notes and provide consents to the proposed amendments on or prior to the Consent Date will receive a consent payment of $20 per $1,000 principal amount of notes as part of their total consideration. In such case, the total consideration including consent payment to be paid for each validly tendered note and delivered consent will be the greater of a) $1,062.78 and b) a price based on a fixed spread of 50 basis points over the yield to maturity on the applicable reference U.S. Treasury Note.

The yield to maturity of the reference U.S. Treasury Note used in the fixed spread formula will be set at 2:00 p.m., New York City time, on the Consent Date. Unisys expects to pay the total consideration promptly after the Consent Date for notes validly tendered on or prior to the Consent Date and accepted for purchase.

Holders who validly tender their notes and provide consents after the Consent Date and prior to the Expiration Date are not entitled to the $20 consent payment, and will receive as payment for their notes the total consideration minus the consent payment. Unisys expects to make payment promptly after the Expiration Date for notes validly tendered after the Consent Date and prior to the Expiration Date and accepted for purchase.

Holders that validly tender their notes will also be paid accrued and unpaid interest up to, but not including, the applicable payment date for their notes.

The terms and conditions of the tender offer and consent solicitation, including Unisys obligation to accept the notes tendered and pay the purchase price and consent payments, are set forth in Unisys Offer to Purchase and Consent Solicitation Statement, dated May 22, 2001. Unisys may amend, extend or, subject to certain conditions, terminate the tender offer and consent solicitation.

Unisys has retained Bear, Stearns & Co. Inc. to act as the exclusive Dealer Manager and Solicitation Agent in connection with the tender offer and consent solicitation. Requests for documents may be directed to Georgeson Shareholder Communications Inc., the information agent, at 800/223-2064. Questions regarding the tender offer and consent solicitation may be directed to Bear, Stearns & Co. Inc. at 877/696-2327.

This release does not constitute an offer to purchase, a solicitation of an offer to purchase, or a solicitation of consents with respect to any securities. Any such offer or solicitation will be made only by means of the Offer to Purchase and Consent Solicitation Statement, dated May 22, 2001.

About Unisys

Unisys is an e-business solutions company whose 37,000 employees help customers in 100 countries apply information technology to seize opportunities and overcome challenges of the Internet economy. Unisys people integrate and deliver the solutions, services, platforms and network infrastructure required by business and government to transform their organizations for success in this new era.

The company offers a rich portfolio of Unisys e-@ction Solutions for e-business based on its expertise in vertical industry solutions, network services, outsourcing, systems integration and multivendor support, coupled with enterprise-class server and related technologies. The primary vertical markets Unisys serves worldwide include financial services, transportation, communications, publishing and commercial sectors, as well as the public sector, including federal government customers.