UbiquiTel plans exchange offer for 14% '10 notes

UbiquiTel Operating Co. said Thursday (Jan. 23) that it plans to offer new debt in exchange for up to $225 million of its outstanding 14% senior subordinated discount notes due 2010.

UbiqiTel Operating - a wholly-owned subsidiary of UbiquiTel Inc., a Conshohocken, Pa.-based Sprint PCS affiliate - said it intends to offer up to $56.25 million aggregate principal amount of new 14% senior discount notes due 2010 in exchange for the outstanding notes.

The exchange offer will expire at 5 p.m. ET on Feb. 21, with an early tender deadline of 5 p.m. ET on Feb. 5, both deadlines subject to possible extension.

The company is offering to issue $250 in principal amount of the new notes per $1,000 principal amount of the existing notes validly tendered and accepted, up to a maximum of $225 million principal amount of the existing notes. If more than $225 million of the existing notes are validly tendered prior to the expiration date, the company will accept tenders from its noteholders on a pro- rata basis.

In addition to offering the new notes for the existing securities, UbiqiTel is also offering to pay $50 in cash for each $1,000 principal amount of existing notes that are validly tendered prior to early tender deadline and accepted for purchase by the company.

UbiquiTel said the offer is only being made inside the U.S. to investors who could be considered "qualified institutional buyers" or "accredited investors," or to "non-U.S. persons," as defined by the Securities Act of 1933. The new notes have not been registered under the Act for unrestricted public trading, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. The company said it will at some point in the future enter into a registration rights agreement under which it will agree to file an exchange offer registration statement with the Securities and Exchange Commission in order to exchange the new notes being issued in this transaction for registered notes having substantially identical terms.

The company said that the new notes to be issued in the offer will be senior unsecured obligations of the company, will be guaranteed on a senior unsecured basis by UbiquiTel Inc. and all of the company's existing and future restricted subsidiaries and will rank senior to the existing notes that will remain outstanding after consummation of the offer.

The offer is subject to the receipt of requisite consents from the lenders under the company's senior secured credit facility; completion of a new financing on terms acceptable to the company to fund the cash portion of the offer; and certain other general conditions.

UbiquiTel said that it has already reached an agreement in principle with its credit facility lenders for their consent to the offer. The lenders are conditioning their consent on the company being able to finance the entire cash portion of the offer through a new financing.

To that end, UbiquiTel also reached an agreement in principle with certain accredited investors (some of whom are directors of corporate parent UbiquiTel Inc.) for a new financing to raise the $11.25 million cash portion of the offer in a private placement; it anticipates that this will involve the issuance of approximately $15 million aggregate principal amount of the company's 14% senior discount notes due 2008, which will rank pari passu in right of payment to the new notes being offered in the offer, and which will have customary covenants and terms. The company expects that warrants to purchase 11.25 million shares of UbiquiTel Inc.'s common stock will be issued to the investors in conjunction with the new financing. The closing of this private placement of notes and warrants will be contingent upon the consummation of the exchange offer, and the concurrence of The Nasdaq Stock Market, Inc. with respect to UbiquiTel Inc.'s interpretation of certain shareholder approval requirements in connection with warrants to be issued to participating directors.

In conjunction with having agreed to consent to the exchange offer, the credit facility lenders also have sought modifications to the credit facility, which the company expects to include a $15 million partial prepayment against the outstanding $245 million principal balance of term loans, a $5 million permanent reduction in the unused $55 million revolving line of credit and the company entering into a letter of intent to sell certain non-core tower assets.

UbiquiTel expects to use the anticipated combined proceeds of approximately $20 million from the tower assets sale and a previously reported income tax refund expected to be monetized in 2003 to offset the anticipated amount to be prepaid on the company's outstanding terms loans. However, there it said it could give no assurance that it will either complete the assets sale or receive the tax refund. The conditions under the pending senior secured credit facility amendment to prepay a portion of outstanding term loans and reduce the unused revolving line of credit will be contingent upon the consummation of the exchange offer.

Millicom exchange offer for 13½% '06 notes

Millicom International Cellular SA said Tuesday (Jan. 21) that it has begun an offer to exchange two issues of new debt for all of its outstanding 13½% senior subordinated discount notes due 2006, and has also begun a related solicitation of noteholder consents to proposed indenture changes.

Millicom, a Bertrange, Luxembourg-based telecommunications investor, said that the exchange offer and consent solicitation will expire at 5 p.m. ET on Feb. 20, subject to possible extension.

The exchange offer is being made in a private offering only to U.S. holders of the existing notes who could be considered either "qualified institutional buyers" or "accredited investors" or to holders who are not "U.S. persons," as all of these terms are defined by the Securities Act of 1933.

The company said that holders of the existing notes who validly tender them for exchange will receive $600 of Millicom's newly issued 9% senior notes due 2005, plus $75 of Millicom's newly issued 4% senior convertible PIK (payment in kind) notes due 2005 per $1,000 of the existing notes.

It noted that the new 4% notes are convertible into Millicom's common stock at any time after April 1 at a conversion price of $5 per share, which may result in a dilution to existing Millicom stockholders of approximately 22% (assuming the company issues no additional PIK notes in lieu of cash interest). At their maturity or upon their redemption, Millicom - at its option - may pay the then-outstanding principal amount of the 4% notes in whole or in part, plus the accrued and unpaid interest on the notes, either in cash or in shares of its common stock.

Millicom said that its wholly owned Millicom International Operations BV subsidiary will irrevocably and unconditionally guarantee both the new 9% notes and the new 4% notes.

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