Pac-West plans exchange offer for 13.5% notes as part of restructuring

By Angela McDaniels

Seattle, Nov. 16 - Pac-West Telecomm, Inc. said it plans to hold an exchange offer for its 13.5% senior notes due 2009.

Noteholders who tender for exchange will receive new 13.5% notes with terms and conditions substantially identical to the old 13.5% notes, except that interest under the new 13.5% notes will not be payable until maturity. In addition, the holders of the new 13.5% notes will have the right to receive payment of all outstanding principal and accrued interest before the holders of the old 13.5% notes receive any payment of principal.

The company made the announcement after receiving a commitment from SMH Capital Advisors, Inc. - which has discretion over $21.0 million of the $36.1 million outstanding principal amount of the notes - to tender the notes should the company hold an exchange offer, according to an 8-K filing with the Securities and Exchange Commission.

SMH Capital Advisors made the commitment after it received a liquidation analysis estimating that, were the company to liquidate on Nov. 30, noteholders would receive a distribution of between 1% and 10% of the principal amount of notes outstanding, according to the filing.

Pac-West is planning the exchange offer as part of its restructuring, under which an affiliate of private investment company Columbia Ventures Corp. purchased Pac-West's senior secured credit facility, Pac-West issued $1 million of preferred stock to another affiliate of Columbia Ventures and Pac-West agreed to restructure the $5.7 million owed to Merrill Lynch Capital.

Under the terms of the Merrill Lynch restructuring agreement, Pac-West will pay Merrill Lynch 20% of any interest savings achieved by the tender of more than $21.0 million of the 13.5% notes.

Pac-West is a communications company based in Stockton, Calif.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.