Avaya tenders for 11 1/8% notes

New York, Nov. 1 - Avaya Inc. said it has begun a cash tender offer for any and all of its 11 1/8% senior secured notes due 2009.

The Basking Ridge, N.J., provider of business communications software, systems and services is also seeking consents to amend the note indenture to eliminate substantially all restrictive covenants, the reporting requirements, certain events of default, and the requirement to provide security for the notes and related provisions regarding the collateral.

An initial settlement on Nov. 16 is planned for notes tendered by the consent date of 5 p.m. ET on Nov. 15, and the expiration date is 5 p.m. ET on Dec. 1.

The price per $1,000 principal amount of notes will be the present value on the initial settlement date of $1,055.63 (the amount payable on the first call date of April 1, 2006) and the interest from the last interest payment date until April 1, 2006, discounted at a rate equal of 50 basis points over the yield on the 1.50% U.S. Treasury note due March 31, 2006. This total includes a consent payment of $30 per $1,000 that will only be paid to holders who tender by the consent date.

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

The reference yield will be fixed at 2 p.m. ET on Nov. 15.

The offer is subject to conditions, including the receipt of consents from holders of at least a majority of the notes, execution of a supplemental indenture amending the notes, and other customary conditions.

Citigroup is the dealer manager and solicitation agent (800 558-3745 or 212 723-6106). Georgeson Shareholder Communications is the information agent (800 457-5303). Commerzbank Securities and Mitsubishi Securities are co-dealer managers.

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