Dobson Communications sets pricing in tender for $250 million floaters, receives consents

New York, May 19 - Dobson Communications Corp. said its wholly owned subsidiary, Dobson Cellular Services, Inc., obtained the necessary consents to amend its $250 million of first-priority senior secured floating-rate notes due 2011 and set pricing in the tender offer for the securities.

For each $1,000 principal amount tendered by the consent deadline, Dobson will pay $1,038.45, which includes a consent payment of $30.00.

Pricing was set at 2 p.m. ET on May 19.

Dobson announced the tender on May 9, saying it planned to fund the offer by reissuing the debt as a $250 million add-on to its existing 8 3/8% first-priority senior secured fixed-rate notes due Nov. 1, 2011.

According to the indenture on the first-priority notes, in order to refinance either one of those first-priority tranches with new first-priority notes the company must redeem a sufficient amount of the old notes and exchange them for new ones so as not to create new liens, the source commented.

Therefore the company is tendering for the floating-rate notes by adding on to the fixed-rate issue.

As part of the tender, the Oklahoma City wireless phone services provider is also soliciting consents to amend the note indenture so that the tendered floaters can be resold in an amended form with substantially identical terms to Dobson Cellular's existing 8 3/8% first-priority senior secured series B notes due 2011.

If the company receives tenders for fewer than all the floaters, Dobson Cellular said it intends to issue additional series B notes and added it will use the proceeds to redeem the non-tendered notes.

The consent solicitation will expire at 5 p.m. ET on May 19 and the tender ends at midnight ET on June 5.

For each $1,000 principal amount of notes, the company said it will determine its payout using the present value of $1,020.00 - the redemption amount on the notes' first call date on May 22 - discounted using the yield on the 2.5% Treasury due Oct. 31 and 50 basis points.

The company added that the coupon rate on the notes as of the most recent coupon reset date prior to the launch of the tender offer, 9.89875%, will be used in calculating the total consideration.

The payout includes a $30.00 consent fee for those who tender before the consent deadline.

The offer is conditioned upon tenders from holders of at least 75% of the notes and Dobson Cellular pricing an offer consisting of the resale of the tendered notes as series B notes and the sale of any additional series B notes.

Morgan Stanley & Co. Inc. is the dealer manager and solicitation agent (800 624-1808 or call collect 212 761-1941). Bondholder Communications Group is the information and tender agent (call collect 212 809-2663).

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