By Paul A. Harris
St. Louis, March 22 - Eschelon Operating Co. priced an upsized $48 million add-on to its 8 3/8% senior second secured notes due March 15, 2010 (B3/B-) at 95.00 resulting in a 9.343% yield to worst and a 9.929% yield to maturity on Wednesday, according to an informed source.
The dollar price of the add-on came on top of price talk.
The sale generated $45.6 million of proceeds.
Jefferies & Co. ran the books for the add-on notes, which will be registered with the Securities and Exchange Commission.
Proceeds will be used for general corporate purposes, including funding the purchase price of the Oregon Telecom Inc. acquisition, which may include repaying Oregon Telecom Inc. debt; making additions to working capital; and funding future acquisitions.
The add-on was upsized from $35 million.
The original $100 million issue priced at 84.813 on March 10, 2004 to yield 12%. A $65 million add-on priced on Nov. 19, 2004 at 79.0 resulting in 14.132% yield to worst.
Eschelon is a Minneapolis-based voice, data and internet services provider.
| Issuer: | Eschelon Operating Co.
|
| Face amount: | $48 million
|
| Proceeds: | $45.6 million (increased from $35 million)
|
| Maturity: | March 15, 2010
|
| Security description: | Add-on to the 8 3/8% senior second secured notes
|
| Bookrunner: | Jefferies & Co.
|
| Coupon: | 8 3/8%
|
| Price: | 95.00
|
| Yield to worst: | 9.343%
|
| Yield to maturity: | 9.929%
|
| Spread: | 464 basis points
|
| Call features: | Callable on or after March 15, 2007 at 106.0, 103.0, par on or after March 15, 2009
|
| Equity clawback: | Until March 15, 2007 for 35% at 112.0
|
| Trade date: | March 22
|
| Settlement date: | March 28 with accrued interest
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Distribution: | SEC registered
|
| Price talk: | 95.00
|
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