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Published on 12/9/2004 in the Prospect News Bank Loan Daily and Prospect News High Yield Daily.

Alamosa lining up loan commitment in case AirGate bondholders exercise puts

By Sara Rosenberg

New York, Dec. 9 - Alamosa Holdings Inc. is working on a new credit facility commitment on the chance that AirGate PCS Inc. bondholders opt to exercise their puts instead of agreeing to a change-of-control offer that will be initiated in connection with the acquisition of AirGate.

"Public debt of AirGate will continue to be outstanding. We will make a change-of-control offer as required under AirGate bonds. There is a possibility that some or all of AirGate's bondholders will exercise their put rights and we'd be obligated to purchase any bonds put at 101% face value," company officials said in a conference call Thursday morning.

"In light of this possibility we have received a highly competent letter from our bank group related to their ability to finance the transaction and we're currently working within the secured committed financing, which we expect to have shortly, "officials added in the call.

On Wednesday, Alamosa announced that it would purchase AirGate in a transaction valued at about $630 million, including the assumption of net debt of about $238 million.

Under the transaction agreement, AirGate common stock holders would get 2.87 Alamosa shares for every AirGate share. In addition, AirGate shareholders will have the option to elect cash consideration in place of Alamosa stock, up to a total amount of $100 million subject to proration.

The transaction, which is subject to customary regulatory review, approval by Sprint and approval of the shareholders of AirGate and Alamosa, is expected to close in the second quarter of 2005.

Alamosa's financial adviser was UBS Investment Bank, and AirGate's financial adviser was Banc of America Securities LLC.

Lubbock, Texas-based Alamosa and Atlanta-based AirGate are both Sprint affiliated providers of wireless personal communication services.


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