Nextel Partners completes partial redemption of 12½% notes

New York, Jan. 2 - Nextel Partners, Inc. (Caa1/CCC+) said that it had completed the previously announced partial redemption of $67.7 million principal amount at maturity of its 12½% senior notes due 2009, using a portion of the proceeds from its recent equity offering. Including accrued interest, the total amount of the redemption was $77.2 million.

Following the completion of the partial redemption, the company has $146.3 million principal amount at maturity of the 12½% notes outstanding.

Nextel Partners said that as a result of the partial redemption, it has managed to reduce its weighted average cost of debt to 7.5%, a 34% improvement from 11.4% a year ago, and has lowered its annualized cash interest obligation by about $8.5 million.

As previously announced, Nextel Partners, a Kirkland, Wash.-based affiliate of Nextel Communications Inc. which offers Nextel's wireless service to customers in 31 states, said on Oct. 30, 2003 that it had filed a registration statement with the Securities and Exchange Commission for a public offering of 33 million shares of class A common stock, and said it planned to use the proceeds of the equity offering to redeem approximately 32% of the outstanding principal amount of its 12½% notes, or about $67.7 million principal amount at maturity, and for working capital and general corporate purposes.

The company said that pending these uses, the net proceeds of the offering would be invested in short-term, interest-bearing government or investment-grade securities.

Nextel Partners did not at that time specify a timeframe for the redemption of the 12½% notes.

The company said that of the 33 million shares it would offer, 10 million shares would be newly issued class A shares offered by Nextel Partners. The remaining 23 million class A shares would be offered by DLJ Merchant Banking Partners II, LP, Madison Dearborn Capital Partners II, LP and Motorola, Inc. Nextel Partners also said that in addition, certain of these selling stockholders had granted the underwriters an option to purchase up to an additional 4.95 million class A shares to cover over-allotments. Nextel Partners said it would not receive any of the proceeds from the shares offered by the selling stockholders.

On Nov. 14, Nextel Partners announced that it had priced a public offering of 33 million shares, with underwriters given a greenshoe option on an additional 4.95 million shares. Of the shares priced, Nextel Partners was offering 10 million shares and selling stockholders the remainder. Gross proceeds to the company following the pricing at $10.80 per share were estimated at $108 million, with net proceeds estimated at $104.2 million, out of which the company said that it would partially redeem the 12½% notes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.