iBasis extends exchange for convertibles

New York, June 14 - iBasis, Inc. said it has extended its exchange offer of new 6¾% convertible subordinated notes due 2009 in exchange for its $38.2 million principal amount of 5¾% convertible subordinated notes due March 2005.

The offer will now expire on June 17 instead of midnight ET on June 14.

iBasis said that based on information as of 4 p.m. ET on Monday that it expects at least 90% of the convertibles to be tendered.

Peter Aquino, senior managing director at Capital & Technology Advisors and financial advisor to the informal committee of holders of the 5¾% convertibles, said: "The committee is enthusiastic about the iBasis business and is looking forward to closing the debt refinancing."

iBasis announced on May 14 it had begun its previously announced exchange offer.

The new convertibles are being offered on a one-for-one basis in exchange for the existing convertibles. They will have a higher coupon, a longer maturity and a "significantly reduced" conversion price. The existing notes convert at $86.14 per share while the new notes will convert at $1.85.

The new notes will have a non-callable period until June 15, 2005 and then a provisional call with a 150% hurdle. From June 15, 2007 they will have a hard call, initially at 102.

The exchange is subject to conditions including the tender of at least 90% of the existing convertibles.

An informal committee of holders of 48% of the notes along with other investors for a total of 75% of the notes have agreed in principle to support the exchange, according to an S-4/A filing with the Securities and Exchange Commission.

The Burlington, Mass., telecommunications company also plans to refinance its $25.2 million 11½% senior secured notes due January 2005.

The transactions are intended to refinance the company's $67.9 million of debt coming due within the next two years. If iBasis is not successful it warned that it may not be able to meet its obligations.

Imperial Capital LLC is the dealer manager for the convertible exchange. D.F. King & Co. Inc. is the exchange agent.

iBasis also said in the registration statement that it plans to prepay the 11½% senior secured notes. It will also terminate various securities exchange agreements by paying $25.175 million in cash and issuing warrants for 5.176 million shares of common stock. The warrants will have an exercise price of $1.85 per share and will run for three years.

To fund the redemption, iBasis said it has a commitment of $25.2 million from a third party. In return it will issue new 8% three-year senior notes. However iBasis may also obtain the financing from other sources.

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