Nextel Partners tenders for 11% notes

New York, April 28 - Nextel Partners Inc. (Caa1/CCC+) said that it has 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, and said the tender offer would expire at midnight ET on May 25, with settlement expected on May 26. All deadlines are subject to possible extension.

Nextel Partners, a Kirkland, Wash.-based company that provides Nextel wireless service to mid-sized and rural markets in 31 states, said that it would set the consideration it will offer for the notes on the second business day before the consent settlement date (i.e., May 12), 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 and unpaid interest, if any, 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 of notes tendered and accepted for payment. Holders tendering their notes after the consent deadline but before the offer expires will receive the tender offer consideration but will not receive the consent payment.

Holders who tender their notes in the tender offer prior to the consent deadline are obligated to also deliver a consent. Holders cannot deliver a consent without tendering their notes. Any notes tendered before the consent deadline may be withdrawn at any time up to the deadline but not after that. Notes tendered after the consent deadline may not be withdrawn.

Nextel Partners said it intends to finance the tender offer with the proceeds from an incremental term loan and a Rule 144A offering of senior notes, together with other available funds.

It said that the closing of the tender offer is 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.

Nextel Partners has retained Morgan Stanley & Co. Inc. (call 212 761-1941, or 800 624-1808) and J.P. Morgan Securities Inc. (call 212 270-9769) to serve as dealer managers and solicitation agents for the tender offer. D.F. King & Co. Inc. is the information agent for the offer (call 800 487-4870).

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