Telecom CHF, sterling noteholders approve resolutions at meeting

By Jennifer Chiou

New York, Sept. 23 - Telecom Corp. of New Zealand Ltd.'s TCNZ Finance Ltd. announced that holders of its CHF 200 million of 4.375% notes due 2012 and its £125 million of 5.625% notes due 2018 and £150 million of 5.75% notes due 2020 voted in favor of extraordinary resolutions at separate meetings on Thursday.

On Sept. 16, the company said that it had already received tender instructions from holders of more than 75% of the 4.375% notes due 2012.

The company launched on Aug. 31 a solicitation of consents to waive any event of default that may occur as a result of the demerger into Telecom, a telecommunications and IT services company, and Chorus Ltd., a fixed-line access network infrastructure company.

Holders also approved a new condition requiring Telecom to redeem all of the notes at their early redemption amount if final court orders related to the demerger are obtained.

The early submission deadline was 11 a.m. ET on Sept. 14, and the deadline for submitting voting instructions was 6:45 a.m. ET on Sept. 20.

Holders who submitted instructions in favor of the resolution by the early submission deadline will receive an early consent fee equal to CHF 25.00 per CHF 5,000 principal amount of notes.

As reported on Sept. 14, the company received consents from holders of more than 75% of each of the sterling notes series.

The company began an exchange offer for the notes also on Aug. 31, asking the holders to pass an extraordinary resolution sanctioning the waiver of any event of default that may occur as a result of its planned demerger.

The early submission deadline was 11 a.m. ET on Sept. 9, and the final deadline was 6 a.m. ET on Sept. 20. The settlement date is expected to be Nov. 30.

As previously reported, holders who exchange notes will receive an equal amount of British pound-denominated 6.75% notes due 2020 issued by Chorus under its euro medium-term note program plus accrued interest.

As of the early deadline, holders had tendered for exchange £231 million total of the bonds. As of Sept. 22, Telecom said it has received irrevocable instructions from holders of £102,581,000 of the 5.625% notes as well as £132,242,000 of the 5.75% notes electing to exchange their bonds for the new Chorus securities.

As a result - conditioned on the demerger - £22,419,000 of the 5.625% notes and £17,758,000 of the 5.75% notes will be left outstanding post-demerger, and £234,823,000 of the Chorus bonds will be issued post-demerger.

As noted, holders who exchanged prior to the early submission deadline will receive in cash an early exchange fee of £20.00 per £1,000 principal amount of 5.625% notes and £10.00 per £1,000 principal amount of 5.75% notes.

In addition, holders who submitted an early voting instruction in favor of the extraordinary resolution by the early submission deadline will receive an early voting fee of £5.00 per £1,000 principal amount of notes.

Holders who exchange were deemed to have submitted a voting instruction in favor of the extraordinary resolution.

Holders had to exchange a minimum of £100,000 of notes in order to participate in the exchange offer.

Questions may be directed to Mark Laing at GM Capital Markets (64 27 227 5890).

For the pound-denominated notes, the dealer manager was Citigroup Global Markets Ltd. (+44 0 207 986 8969 or liabilitymanagement.europe@citi.com), and the tabulation agent was Citibank, NA (+44 0 207 508 3867 or exchange.gats@citi.com).

For the franc-denominated notes, the dealer managers are Citigroup and Credit Suisse Securities (Europe) Ltd. (+44 20 7883 9198 or liability.management@credit-suisse.com). The Swiss proxy agent was Credit Suisse AG (+41 44 333 49 73 or +41 44 333 28 86), and the tabulation agent was Citibank.

The telecommunications company is based in Auckland, New Zealand.

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