McLeodUSA talks $110 million five-year notes at 10½% area, final conference call Tuesday morning

By Paul A. Harris

St. Louis, Sept. 18 - McLeodUSA Inc. talked its $110 million offering of five-year senior second secured notes (B3/B-) at the 10½% area on Monday, according to an informed source.

The company will host the final investor call at 11 a.m. ET on Tuesday. Books are scheduled to close at 1 p.m. ET Tuesday.

Jefferies & Co. has the books for the notes, which are being sold via Rule 144A and Regulation S.

The notes will come with a make-whole call at Treasuries plus 50 basis points for the first three years, after which they will become callable at a premium.

Proceeds will be used to repay the company's senior secured credit facility, to cash collateralize certain existing letters of credit and for general corporate purposes.

Hiawatha, Iowa-based McLeodUSA provides facilities-based integrated voice and data services for businesses in the Central, Southwestern and Rocky Mountain states.

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