FairPoint gets consents, extends deadlines on offers for four note series

New York, July 30 - FairPoint Communications Inc. said it has received the necessary consents to proposed indenture changes from the holders of its 9½% senior subordinated notes due 2008, floating-rate callable securities due 2008, 12½% senior subordinated notes due 2010 and 11 7/8% senior notes due 2010 as part of its previously announced concurrent tender offers for each of those series of bonds

The company also said that it had extended the expiration deadline on each of its four tender offers to 5 p.m. ET on Sept. 20 from 11:59 p.m. ET on Aug. 12. It also extended the early consent period during which people could still tender their bonds and deliver their consents - and be eligible to receive the commission payment - to 5 p.m. ET on Aug. 29 from 5 p.m. ET on July 29.

As of that now-passed original deadline, tenders and consents representing 95.92% of the 9½% notes, 89.87% of the floating- rate notes, 98.81% of the 12½% notes and 94.91% of the 11 7/8% notes had been received by FairPoint.

It said that supplemental indentures effecting the proposed amendments have been executed, and such amendments will become operative on the date that validly tendered notes are accepted for purchase and payment by FairPoint. Accordingly, tendered notes may not be withdrawn and the relevant consents may not be revoked, except under certain limited circumstances.

As previously announced, FairPoint Communications, a Charlotte, N.C.-based provider of telecommunications services in rural areas, said on July 16 that it had begun concurrent tender offers for the four series of notes. It also began soliciting consents to amend the note indenture to eliminate most of the principal restrictive covenants and amend certain other provisions.

It set an early consent date of 5 p.m. ET on July 29 and an expiration deadline of 11:59 p.m. ET on Aug. 12, both dates subject to possible extension.

FairPoint said it would pay $1,015.42 per $1,000 principal amount for the 9½% notes and $982.50 per $1,000 for the floating-rate securities. Holders who tender by the early consent deadline will receive an additional $20 per $1,000 principal amount.

Prices will be set for the 12½% notes and the 11 7/8% notes.

The price for the 12½% notes will be set as the present value on the payment date of the redemption price on the first call date of $1,062.50 per $1,000 principal amount, plus interest payments from the settlement date to May 1, 2005, discounted by 50 basis points over the yield on the 1.625% U.S. Treasury note due April 30, 2005 minus accrued interest up to but excluding the payment date. The total includes an early consent premium of $20 per $1,000 that will only be paid to holders who tender by the consent date.

The price for the 11 7/8% notes will be set at 35% of the equity clawback price of $1,118.75 per $1,000 principal amount plus 65% of the present value on the payment date of the redemption price on the first call date of $1,059.38 per $1,000 principal amount, plus interest payments from the settlement date to March 1, 2007, discounted by 50 basis points over the yield on the 2.25% U.S. Treasury note due Feb. 15, 2007 minus accrued interest up to but excluding the payment date. The total includes an early consent premium of $20 per $1,000 that will only be paid to holders who tender by the consent date.

In all cases, FairPoint will also pay accrued interest up to but excluding the payment date.

It said the indenture amendments would require the consent of holders of a majority of the principal amount of the 12½% notes, a majority of the principal amount of the 11 7/8% notes and a majority of the principal amount of the two series due 2008 combined.

It said that tendering holders would have to deliver consents and vice versa.

The company said the tender offers would be subject to several conditions, including FairPoint's completion of its proposed Income Deposit Securities offering and senior subordinated note offering and obtaining a new senior secured credit facility, a minimum amount of notes being tendered and the receipt of enough consents to amend the indentures.

Citigroup is dealer manager and solicitation agent (call 800 558-3745 or 212 723-6106). Global Bondholder Services Corp. is the information agent (call 212 430-3774).

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