MTS uses grace period on 9 3/8% notes to discuss strategic alternatives with lenders

By Carlise Newman

Chicago, April 29 - MTS, Inc. said it will use the 30-day grace period for payment of interest on its 9 3/8% senior subordinated notes due 2005 to consider strategic options.

The $5,156,250 payment was due May 1.

If the company fails to make the interest payment before the end of the grace period it will be in default and the cross-default provisions of its credit facility and term loan agreements would be triggered, resulting in default under those agreements as well, the company said.

MTS has been in discussions with the senior lenders under its credit facility and term loan agreements, as well as with its other major creditors and stakeholders, including major holders of the notes, concerning various strategic alternatives, the company said in a filing with the Securities and Exchange Commission.

West Sacramento, Calif.-based MTS also announced it has appointed E. Allen Rodriguez as chief executive officer effective April 26.

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