Telefonica CTC Chile extends early tender deadline in second stage of note tender

New York, Nov. 19 - Compania de Telecomunicaciones de Chile SA said it extended the early tender deadline in the second part of its offer to buy up to $200 million principal amount of its outstanding notes.

The early tender deadline will now be the same as the expiration date, 5 p.m. ET on Dec. 1.

So far, the company has received tenders of $54.313 million of its notes in the second stage of the offer, made up of $11.595 million or 19% of its $61.298 million 7 5/8% notes due 2006 and $42.718 million or 21% of its $200 million 8 3/8% notes due 2006.

At the last announcement on Nov. 10, Telefonica CTC Chile said it received and accepted tenders of $126.837 million principal amount or 67.34% of its $187.685 million 7 5/8% notes due 2006 in the first stage of its two-part offer to buy up to $200 million principal amount of its outstanding notes.

On Nov. 5, Telefonica CTC Chile set the pricing in the first stage of the offer. Telefonica CTC Chile said it will pay $1,071.03 per $1,000 principal amount for its 7 5/8% notes in what it is calling the "Any and All Tender."

The Santiago, Chile, telecommunications company announced on Oct. 29 that it had begun cash tender offers for $200 million principal amount of its outstanding notes in a move intended to reduce leverage and interest expense. Proceeds from the sale of Telefonica CTC Chile's mobile business and operating cash flow will be used to fund the transaction.

The tender is in two parts.

Telefonica CTC Chile is first offering to buy any and all of its $187.685 million of 7 5/8% notes due 2006 in the "Any and All Tender."

In the second portion, Telefonica CTC Chile will use the $200 million, less the principal amount of notes bought in the first part, to buy its $187.685 million of 7 5/8% notes due 2006 and $200 million of 8 3/8% notes due 2006. It is calling the second part the "Maximum Tender."

The first part of the tender expired at 5 p.m. ET on Nov. 9.

The second part had an early tender deadline of 5 p.m. ET on Nov. 18 and ends at 5 p.m. ET on Dec. 1.

For the Any and All Tender, pricing was set as a 50 basis point fixed spread over the bid-side yield on the 2.75% U.S. Treasury note due July 21, 2006 at 2 p.m. ET on Nov. 5.

In the Maximum Tender, pricing will be set as a fixed spread over the bid-side yield on the reference U.S. Treasury security at 2 p.m. ET on Nov. 29. Of the total, $10 per $1,000 principal amount will be the early tender fee. Holders who tender after the early tender deadline will not receive that amount.

The pricing formula for the 7 5/8% notes will be the same as for the Any and All Tender, a 50 basis point fixed spread over the bid-side yield on the 2.75% U.S. Treasury note due July 31, 2006.

For the 8 3/8% notes, the formula will be a 50 basis point fixed spread over the bid-side yield of the 1.875% U.S. Treasury note due Dec. 31, 2005.

Based on a hypothetical settlement date of Dec. 3 and using the Oct. 27 yield on the reference security, the price would be $1,071.93 for the 7 5/8% notes and $1,058.50 for the 8 3/8% notes.

Telefonica CTC Chile will also pay accrued interest up to but excluding the settlement date.

Citigroup Global Markets Inc. is dealer manager (800 558-3745) and Global Bondholder Services Corp. is the depositary agent and information agent (866 470-4300 or 212 430-3774).

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