Nextel Partners buys $352.5 million 11% notes

New York, May 19 - Nextel Partners Inc. said it has accepted for purchase $352.5 million principal amount of its outstanding 11% senior notes due 2010 as part of its previously announced tender offer and consent solicitation for the notes. The notes had been tendered by the now-expired May 11 consent deadline and holders will receive $1,123.44 per $1,000 principal amount including a $35 consent payment.

Nextel Partners said the notes accepted for purchase represent 98.8% of the amount outstanding. Total purchase price was $396.1 million

The company said a portion of the 11% notes accepted for purchase were funded with proceeds from Nextel Partners' sale of $25 million principal amount of new 8 1/8% senior notes due 2011, which closed Wednesday.

The underlying tender offer meanwhile continues and is scheduled to expire on May 25, subject to possible extension.

Nextel Partners also announced that its wholly owned subsidiary, Nextel Partners Operating Corp., has refinanced its existing $375 million tranche B term loan with a new $700 million tranche C term loan. The borrowings under the new term loan will be used to repay the existing tranche B term loan as well as fund a portion of the tender offer.

As previously announced, Nextel Partners, a Kirkland, Wash.-based company that provides Nextel wireless service to mid-sized and rural markets, said on April 28 that it had begun a cash tender offer for any and all of its outstanding 11% senior notes due 2010 and is also soliciting noteholder consents to proposed indenture changes. The company issued $200 million of the notes in February 2000.

It set a consent deadline of 5 p.m. ET on May 11, with pricing tentatively set for May 12 and settlement expected on May 14 (the settlement deadline was subsequently extended) and said the tender offer would expire at midnight ET on May 25, with settlement expected on May 26, subject to possible extension.

Nextel Partners said that it would set the consideration it will offer for the notes on the second business day before the consent settlement date using a formula based on a 62.5 basis point fixed spread over the yield to maturity of the reference security, the 1 5/8% U.S. Treasury note due March 31, 2005. The consideration will include accrued interest up to but not including the settlement date.

Total consideration for notes tendered by the consent deadline (the holders thus consenting to the proposed indenture changes eliminating substantially all of the restrictive covenants and certain events of default, as well as making certain other amendments) will include a consent payment of $35 per $1,000 principal amount.

Holders tendering their notes after the consent deadline but before the offer expires will not receive the consent payment.

Holders who tender must deliver consents and vice versa.

On May 12, Nextel Partners said that it had received the necessary consents from the noteholders. It said that as of the consent deadline expiration at 5 p.m. ET on May 11, the company had received consents from 98.17% of the holders of the notes under Cusip 65333FAF4 and 99.33% of the holders of the notes under Cusip 65333FAH0.

Nextel Partners also announced the price it would pay for the notes - $1,124.59 per $1,000 principal amount of the notes for those tendered by the consent deadline. It said holders tendering after the deadline would receive $35 less.

On May 14, the company said it had extended the consent settlement date to 5 p.m. ET on May 19 from 5 p.m. ET on May 14.

It said the payment for the notes would now be $1,123.44 per $1,000 principal amount, including a $35 consent payment.

Nextel Partners said that the closing of the tender offer would be subject to the receipt by Nextel Partners of valid tenders of at least a majority of the outstanding principal amount of the notes; the execution by Nextel Partners of supplemental indentures implementing the proposed amendments following receipt by the company of the required consents; and Nextel Partners having obtained funds for the tender offer.

Morgan Stanley & Co. Inc. (212 761-1941 or 800 624-1808) and J.P. Morgan Securities Inc.

(212 270-9769) are dealer managers and solicitation agents. D.F. King & Co. Inc. is the information agent

(800 487-4870).

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