Dobson starts roadshow for $700 million three-part bond offering

By Paul A. Harris

St. Louis, Oct. 20 - Dobson Cellular Systems Inc. began a roadshow Wednesday for a $700 million three-tranche offering of bonds, according to a syndicate source.

Pricing is expected in the middle of the Oct. 25 week.

The company plans to offer $500 million that will be split between a tranche of seven-year first priority senior secured fixed-rate notes, which will be non-callable for four years and have a three-year 35% equity clawback, and seven-year first priority senior secured floating-rate notes, which will be non-callable for two years.

The company is also offering $200 million of eight-year fixed-rate second priority senior secured notes, which will be non-callable for four years and will have a three-year 35% equity clawback.

Morgan Stanley, Lehman Brothers and Bear Stearns & Co. are joint bookrunners for the Rule 144A/Regulation S deal.

Proceeds will be used to refinance the existing senior credit facility of Dobson Cellular and for general corporate purposes, including the funding of the subsidiary's planned acquisition of RFB Cellular Inc.

Dobson Cellular is a subsidiary of Oklahoma City-based Dobson Communications Corp.

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