Windstream gets tenders for 89.7% of Paetec's 8 7/8% notes so far

By Angela McDaniels

Tacoma, Wash., Jan. 23 - Windstream Corp. had received tenders for $583.3 million principal amount, or 89.7%, of Paetec Holding Corp.'s $650 million principal amount of 8 7/8% senior secured notes due 2017 as of 5 p.m. ET on Jan. 22, the early tender deadline.

Windstream began a tender offer and consent solicitation for the notes on Jan. 8. The tender offer will end at midnight ET on Feb. 5.

The notes tendered by the early tender deadline were accepted for payment and purchased on Jan. 23, according to a company news release. The settlement occurred concurrently with the closing of Windstream's offering of $700 million of 6 3/8% senior notes due 2023.

Windstream paid $1,080.17 for each $1,000 principal amount of notes plus accrued interest. This payment includes a $30.00 consent payment.

For notes tendered after the early tender deadline, the payment will be $1,050.17 per $1,000 principal amount plus accrued interest up to but excluding the settlement date, which is expected to occur promptly following the expiration date.

Windstream said it plans to call for redemption all of the notes that remain outstanding following the tender offer at par plus an applicable premium and accrued interest.

Consent solicitation

The company is soliciting consents to amend the notes to eliminate or modify some restrictive covenants and to release all of the collateral securing obligations under the notes.

The adoption of the amendments required consents from holders of a majority and in some cases at least two-thirds of the outstanding notes. The company said it received the needed consents and has entered into a supplemental indenture, and the amendments, including the release of the collateral, have become effective.

Pricing was set at 2 p.m. ET on Jan. 22 using the bid-side yield on the 0.375% U.S. Treasury note due June 30, 2013 plus a fixed spread of 50 basis points.

The total purchase price is equal to the present value on the early settlement date of $1,044.38 if the amount were to be paid on June 30, 2013 and all scheduled interest payments on the principal amount from the early payment date up to and including the earliest redemption date, discounted to present value based on the fixed spread minus accrued interest up to but excluding the early payment date.

Wells Fargo Securities, LLC (866 309-6316 or collect 704 410-4760) is the dealer manager and solicitation agent. The tender agent and information agent is D.F. King & Co., Inc. (800 290-6426 or banks and brokers 212 269-5550).

Windstream is a Little Rock, Ark.-based provider of network communications, including cloud computing and managed services, to businesses.

Paetec is a competitive local exchange carrier based in Fairport, N.Y. It was acquired by Windstream in 2011.

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