By Paul A. Harris
St. Louis, May 11 - Dobson Cellular Systems, Inc. priced a $250 million issue of 8 3/8% series B first-priority senior secured fixed-rate notes due Nov. 1, 2011 (B1/B) at 105.0 on Thursday, according to a market source.
The issue price came on top of price talk, and resulted in a yield to worst of 7.042% and a yield to maturity of 7.245%.
The sale generated $262.5 million of proceeds.
Morgan Stanley, Bear Stearns & Co. and Lehman Brothers were joint bookrunners for the issue, which was priced via Rule 144A with registration rights and Regulation S. Deutsche Bank Securities was joint lead manager.
The new notes are identical to but non-fungible with the $250 million of 8 3/8% notes priced on Oct. 26, 2004. That sale was part of an overall $825 million transaction that also included a $325 million tranche of 9 7/8% second-priority notes.
Proceeds raised in the sale of the series B notes will be used to fund tender for the company's $250 million issue of three-month Libor plus 475 basis points first-priority senior secured floating-rate notes due 2011, also priced as part of the $825 million October 2004 transaction.
The issuer is an Oklahoma City-based provider of wireless phone services to rural markets in the United States.
| Issuer: | Dobson Cellular Systems, Inc.
|
| Face amount: | $250 million
|
| Proceeds: | $262.5 million
|
| Maturity: | Nov. 1, 2011
|
| Security description: | Series B 8 3/8% senior secured fixed-rate notes due Nov. 1, 2011
|
| Bookrunners: | Morgan Stanley, Bear Stearns & Co., Lehman Brothers
|
| Joint lead manager: | Deutsche Bank Securities
|
| Coupon: | 8 3/8%
|
| Price: | 105.0
|
| Yield to worst: | 7.042%
|
| Yield to maturity: | 7.245%
|
| Spread: | 201 bps
|
| Call features: | Callable after Nov. 1, 2008 at 104.188, 102.094, par on or after Nov. 1, 2010
|
| Equity clawback: | Until Nov. 1, 2007 for 35% at 108.375
|
| Trade date: | May 11
|
| Settlement date: | May 23 with accrued interest
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Price talk: | 105.0 area
|
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