American Cellular tenders for 10% notes

New York, Feb. 14 - Dobson Communications Corp. said its American Cellular Corp. subsidiary has begun a cash tender offer for its $900 million 10% senior notes due 2011.

American Cellular is also soliciting consents to amend the note indenture to remove substantially all of the restrictive covenants.

American Cellular said that if any notes remain outstanding after the tender, it may leave them outstanding until maturity, redeem them after they become callable on Aug. 1, 2007 or buy them back in the open market or privately negotiated transactions.

The tender is part of a refinancing which also includes American Cellular's $18.1 million 9½% senior subordinated notes due 2009, it expects to call, and American Cellular's existing senior secured credit facility.

American Cellular plans to sell $425 million of new senior notes and obtain a new senior secured credit facility of up to $850 million.

For each $1,000 principal amount of the 10% notes, American Cellular will pay a price that will result in a yield to the first call date of the yield to maturity of the 3.875% U.S. Treasury Note due July 31, 2007 as calculated at 2 p.m. ET on the tenth business day preceding the expiration plus 50 basis points, minus the consent payment of $30.00 per $1,000 plus accrued interest up to but excluding the settlement date.

Holders who tender by the consent deadline of 5 p.m. ET on March 1 will also receive the $30.00 per $1,000 consent payment.

The tender ends at midnight ET on March 15.

The tender is subject to conditions, including that at least 75% of the outstanding notes are tendered and that American Cellular complete the refinancing.

Morgan Stanley & Co. Inc. is dealer manager and solicitation agent (800 624-1808 or call collect 212 761-5384, attention: Tate Forrester). Bondholder Communications Group is the information and tender agent (212 809-2663, attention: Denise Conway).

Dobson is an Oklahoma City-based wireless phone company.

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