American Cellular amends, extends tender offer for 10% notes

By Angela McDaniels

Seattle, March 6 - American Cellular Corp. lowered the maximum amount of its 10% senior notes due 2011 it will repurchase during its tender offer to $675 million from $900 million, according to a company news release.

The company planned to fund the tender offer with proceeds from the sale of $425 million new senior notes and a new senior secured credit facility of up to $850 million, but then cancelled the note deal on March 6, citing recent volatility in the bond markets.

American Cellular said it now plans to fund the tender offer with borrowings under a new $1.05 billion senior secured credit facility, which will replace its existing $250 million senior secured credit facility.

As of March 1, holders of 97% of the $900 million outstanding notes had tendered and submitted consents, so the company said it will accept the notes on a pro rata basis.

The tender offer expiration was pushed back to midnight ET on March 19 from March 15.

The company began the tender offer and a consent solicitation to amend the note indenture to remove substantially of the restrictive covenants on Feb. 14.

The tender consideration is $1,065.56 for each $1,000 principal amount of notes. It was determined on March 1 based on a fixed spread of 50 basis points over the yield on the 3 7/8% U.S. Treasury note due July 31, 2007. The reference yield and the tender offer yield were 5.044% and 5.544%, respectively.

The company will also pay accrued interest up to but excluding the settlement date.

The tender consideration includes a consent fee of $30.00 per $1,000 principal amount for noteholders who tendered by 5 p.m. ET on March 1, the consent deadline.

Morgan Stanley & Co. Inc. is the dealer manager and solicitation agent (800 624-1808 or call collect 212 761-5384, attention: Tate Forrester). Bondholder Communications Group is the information and tender agent (212 809-2663, attention: Denise Conway).

American Cellular is a wholly owned subsidiary of Dobson Communications Corp., an Oklahoma City-based provider of wireless phone services to rural markets in the United States.

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