Nextel to redeem 10.65% notes and 11 1/8% preferred with $1 billion deal proceeds

New York, July 17 - Nextel Communications, Inc. said it would sell $1 billion of new senior serial redeemable notes due 2015 in a public offering, and would use a portion of the proceeds to repurchase its outstanding 10.65% senior redeemable discount notes due 2007.

Nextel, a Reston, Va.-based wireless telecommunications operator, said it expects to repurchase the 10.65% notes through a tender offer or redemption transaction, and would also redeem all outstanding shares of its 11 1/8% Series E exchangeable preferred stock, using the net proceeds from the new bond offering, together with cash on hand.

Nextel, as part of its concurrent announcement of second-quarter financial results, also said that as of June 30, it had $676 million principal amount of the 10.65% notes outstanding - a $15 million reduction from the $691 million which was outstanding as of the end of the first quarter ended March 31.

It had $392 million face amount of the 11 1/8% preferred shares outstanding at the end of the quarter, unchanged from the end of the first quarter.

Nextel said that during the second quarter, it had reduced the outstanding principal amount of its 9¾% senior serial redeemable discount notes due 2007 to $912 million from $932 million as of March 31, and had also lowered the amount of its outstanding 9.95% senior serial redeemable discount notes due 2008 to $1.293 billion from $1.301 billion on March 31.

The company's total obligations related to its 9½% senior serial redeemable notes due 2011 - including a non-cash fair value hedge adjustment of $58 million as of March 31 and $65 million at June 30 - increased during the second quarter to $929 million from $922 million on March 31.

Nextel's total long-term debt obligations (which also include its outstanding bank credit facility debt, along with its public debt) decreased to $11.737 billion on June 30 from $11.823 billion on March 31.

Nextel said that the amount of its outstanding 13% series D exchangeable preferred stock mandatorily redeemable in 2009 decreased by $88 million in the second quarter, from $463 million on March 31 to $375 million on June 30.

Its total mandatorily redeemable preferred stock obligations declined to $861 million on June 30 from $947 million on March 31.

The company further said that subsequent to the end of the second quarter, it redeemed all the remaining $375 million face amount of its outstanding 13% series D exchangeable preferred stock, on July 15.

Advanced Medical Optics extends tender for 9¼% notes

New York, July 17 - Advanced Medical Optics, Inc. (B2) extended its previously announced offer to buy back a portion of its outstanding 9¼% senior subordinated notes due 2010 via a "modified Dutch auction" tender process.

The offer, which was scheduled to expire at 12 midnight ET on July 16, was extended to 12 midnight ET on July 18, subject to possible further extension.

All other previously announced terms and conditions of the tender offer remain unchanged.

The company said that as of 5 p.m. ET on July 16, $177 million principal amount of the notes had been tendered.

As previously announced, Advanced Medical Optics, a Santa Ana, Calif.-based maker of ophthalmic surgical and eye care products initially said on June 18 that subject to market conditions and other factors, it would begin a "modified Dutch auction" tender offer for up $75 million aggregate principal amount of its $200 million of outstanding 9 ¼% notes (this offer amount was subsequently increased to $115 million).

The company initially said that the offer would expire at 12 midnight ET on July 16.

Advanced Medical Optics initially said it would offer to purchase the notes for cash at a price of not less than $1,070 per $1,000 principal amount at maturity of notes tendered nor greater than $1,097.50 per $1,000 principal amount, plus accrued and unpaid interest up to, but not including, the date of purchase (the maximum and minimum prices at or between which the company would purchase the notes were subsequently increased).

It said that the final purchase price would be determined via a "modified Dutch auction" procedure, under which the company would accept tenders in the order of lowest to highest tender prices specified by tendering holders within the range. It would select the single lowest purchase price per $1,000 principal amount of notes that would enable it to buy an amount of notes either equal to the $75 million offer amount, or, should less than the that offer amount of notes be tendered, all notes which have been tendered.

The company would pay the same purchase price for all notes tendered at or below that purchase price, subject to proration.

Should the amount of notes tendered under the offer at or below the purchase price exceed the offer amount, Advanced Medical Optics said that it would first accept for purchase all such notes tendered at prices below the purchase price; then it would accept for payment notes tendered at the purchase price on a pro- rata basis from among such tendered notes.

The company said it expected to condition the tender offer on the closing of a private offering of convertible senior subordinated debt securities by Advanced Medical Optics, with the proceeds intended to fund consummation of the tender offer, as well as other conditions set forth in the official offer to purchase. However, it said that it did not expect the tender offer to be conditioned on any minimum principal amount of notes being tendered.

Advanced Medical Optics subsequently and separately announced later on June 18 that it had priced a private offering of $125 million of new 3.5% convertible senior subordinated notes due 2023, plus up to an additional $15 million of notes subject to the initial purchasers' option, and expected to close the offering on June 24. The company said it would use up to approximately $82.3 million of the net proceeds of the offering to repurchase the 9¼% notes as previously announced, with the remainder earmarked for general corporate purposes, which could include the repayment of other indebtedness and, from time to time, additional repurchases of the 9¼% notes. It said that the actual amount of the proceeds to be used in the tender offer would depend on the number of tenders the company actually receives. It further said that if the net proceeds of the convertibles deal are not used to repurchase the 9¼% notes as intended, the company would deposit 70% of the net proceeds into a cash collateral account, to be used to repay indebtedness as required under its senior credit facility.

On July 1, Advanced Medical Optics announced that it had raised the maximum amount of notes it is willing to purchase to $115 million from the originally announced $75 million. It also raised both the minimum and maximum prices at or between which holders could offer to sell their notes back to the company.

The company said that it would purchase the notes for cash at a price between the new minimum price of $1,120 per $1,000 principal amount at maturity of notes tendered and the new maximum price of $1,150 per $1,000 principal amount (up from the previously announced range of $1,070 to $1,097.50 per $1,000 principal amount, plus interest). Tendering holders whose notes are accepted for purchase are to also receive accrued and unpaid interest up to, but not including, the date of purchase.

It said that all other previously announced terms and conditions of the tender offer would remain unchanged.

It further said that it had fulfilled the previously announced financing condition of the tender offer, having closed its recent Rule 144A sale of new convertible notes (the proceeds of which will be used to fund the tender offer) on June 24, as scheduled.

Morgan Stanley & Co. Incorporated will act as exclusive dealer manager (U.S. investors call 800-624-1808; international investors call 212-761-1893). Mellon Investor Services LLC (call 877-698-6865) will act as information agent and Bank of New York will act as depositary in connection with the offer.

Bio-Rad starts tender for 11 5/8% notes

New York, July 17- Bio-Rad Laboratories, Inc. said it has begun a cash tender offer for all $88.715 million of its 11 5/8% senior subordinated notes due 2007.

In connection with the tender offer, the company is soliciting consents to proposed amendments to the indenture governing the notes, which will eliminate substantially all of the restrictive covenants and certain related terms.

The Hercules, Calif. manufacturer and distributor of life science research products and clinical diagnostics said holders who tender and deliver consents by the consent deadline of 5.00 p.m. ET on July 30 will receive total consideration of 110.625% of the principal amount of notes, including a consent payment of 1.5% of the principal amount.

After that date and up to the expiration date of 12:01 a.m. ET on August 14 holders will receive 109.125% of the principal amount of notes.

Goldman, Sachs & Co. (800 828-3182) is dealer manager and solicitation agent and the information agent is Bondholder Communications Group (888 385-2663).

Packaging Corp. to pay $1,102.40 for 9 5/8% notes

New York, July 17 - Packaging Corp. of America announced the pricing on its tender offer for any and all its $550 million 9 5/8% series B senior subordinated notes due 2009.

The Lake Forest, Ill. producer of containerboard and corrugated packaging will pay $1,102.40 per $1m000 principal amount plus accrued interest up to but not including the payment date.

The figure includes a consent payment of $20 per $1,000 principal amount that will only be paid to holders that tendered by 5.00 p.m. ET on July 7.

Packaging Corp. said that in connection it sought and received consents from the holders of a majority of the aggregate principal amount of the notes to certain proposed amendments to the note indenture. Packaging Corp. said it, the subsidiary guarantors and the trustee under the indenture have executed and delivered a supplemental indenture containing the proposed amendments. The amendments eliminate or modify substantially all of the restrictive covenants and certain events of default and related provisions in the indenture. The proposed amendments will not become operative unless and until Packaging Corp. accepts the notes for purchase in the tender.

Morgan Stanley (800 624-1808 or 212 761-1123 (collect), attention: Jeff Kelly) and Goldman Sachs (877 686-5059 or 212 357-5680 (collect), attention: Liability Management Group) are dealer managers and Georgeson Shareholder Communications (800 248-3170) is information agent for the tender offer and consent solicitation.

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