Meritor Strikes Deal To Redeem Notes

Meritor Savings Bank has agreed with a group of noteholders on terms of an offer to redeem those notes and reduce its interest costs.

"As far as I know, this is the first time we've had a consensual deal. Maybe it will set a new pattern," said Wilbur Ross of Rothschild Inc., a noted expert on bankruptcy and financial adviser to a committee of Meritor noteholders.

The troubled Philadelphia savings bank is offering $240 in cash and 180 shares of common stock for each $1,000 in notes. If all notes were tendered, noteholders would own nearly 40% of equity.

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