Pac-West Telecomm extends tender for 13½% '09 notes

Pac-West Telecomm Inc. said on Thursday (Dec. 12) that it had extended its previously announced tender offer for its outstanding 13½% Series B senior notes due 2009. That offer, which was to have expired at 5 p.m. ET on Wednesday Dec. 11 will now expire at 5 p.m. ET on Dec. 27, subject to possible further extension.

Wells Fargo Bank Minnesota NA in Minneapolis (call 800 344-5428) is the information agent and the depositary for the offer.

AS PREVIOUSLY ANNOUNCED, Pac-West Telecom, a Stockton, Calif-based provider of integrated communications services to service providers and business customers in the western U.S., said on Nov. 11 that it expected to announce a cash tender offer for its outstanding 13½% notes on Nov. 12.

Pac-West also said that In connection with the invitation to the noteholders to offer their notes back to the company, it would conduct a consent solicitation to amend the indenture relating to those notes. It said the proposed amendments would - among other things - substantially remove all of the restrictive covenants as well as certain events of default related to such covenants. The company said it would continue to review its debt obligations, including any senior notes not purchased under the tender offer, and consider various alternatives to continue to reduce such obligations.

Pac-West said that the tender offer would be part of the company's continuing effort o reduce the amount of debt in its capital structure. It said that retirement of the 13½% notes would reduce its annual interest expense and accelerate our attainment of free cash flow."

Pac-West Telecom, which also reported third-quarter earnings data on Nov. 11, further said that it had realized a gain on repurchase of bonds of $14.9 million in the quarter, relating to open market purchases undertaken to retire $22.8 million principal amount of the 13½% notes at a significant discount from face value. It said that those debt retirement transactions would result in annual interest payment reductions of approximately $3.1 million per year.

On Nov. 18 Pac-West Telecom announced that it had posted the offering memorandum for its previously announced tender offer and consent solicitation and other related documents on its Internet website, www.pacwest.com. The documents disclosed that the company, as promised, had officially begun the tender offer to the holders of its $106.489 million of remaining outstanding 13½% notes on Nov. 12, as well as the solicitation of noteholder consents to proposed indenture changes.

Pac-West said it would purchase the notes at a price to be determined via a "modified Dutch auction" process. It said that a noteholder could make what the company termed a "competitive offer" to sell the notes at a minimum price within the range of $34 to $42 per $100 principal amount, not including accrued interest, or could alternatively make what Pac-West termed a "noncompetitive offer" to sell the notes without specifying an offer price.

Pac-West said that if it elects to purchase any notes, it would determine a single purchase price, not including accrued interest, and would accept all competitive offers of notes specifying a offer price equal to or less than the company's purchase price, as well as all non-competitive offers made without a specified purchase price. All noteholders whose offers are accepted by Pac-West will receive the same purchase price, even if the purchase price is higher than the offer price submitted by a noteholder. Once an offer has been made by a noteholder, it is considered irrevocable, except that a competitive offer MAY be withdrawn if it is resubmitted at a lower price, or as a non-competitive offer. Non-competitive offers may also be withdrawn under certain limited circumstances.

Noteholders offering their notes to the company will be deemed to have consented to the proposed indenture amendments, which would eliminate substantially all of the restrictive covenants and related events of default. Pac-West said the consents are conditional upon the company's acceptance of at least a majority of the outstanding principal amount of the notes. The purchase price will include a consent payment of 25 cents per $100 principal amount of the notes.

Pac-West said that upon satisfaction of the minimum consent condition, it would deliver to the notes' trustee evidence of receipt of the requisite consents needed for approval of the indenture changes, with that delivery date to be deemed the consent date. Upon execution of a supplemental indenture incorporating the proposed indenture changes, those changes will take effect. Any remaining outstanding notes not tendered under the offer or accepted by the company for purchase will be considered to be bound by the indenture changes.

The tender offer was initially scheduled expire at 5 p.m. ET on Wednesday (Dec. 11) , although this was subsequently extended . Pac-West said it anticipated paying the purchase price for the notes it has accepted under the offer on the settlement date (initially expected to be Dec. 12, but now extended), which in any event, would be no more than five days after the expiration date. The company will also at that time pay in addition to the purchase price all accrued interest on the notes through the day before the settlement date.

Pac-West said it expects to finance the tender offer from available funds.

Equinix extends exchange offer for 13% '07 notes

Equinix, Inc. said on Thursday (Dec. 12) that it had extended its previously announced offer to exchange cash and common stock its remaining outstanding 13% senior notes due in 2007.

That exchange offer, which had been scheduled to expire at 5 p.m. ET on Dec. 24, will now expire at 5 p.m. ET on Dec. 27, subject to possible further extension.

AS PREVIOUSLY ANNOUNCED, Equinix, a Mountainview, Calif.-based provider of core Internet exchange services, said on March 7 that it had retired $25 million of the 13% notes in exchange for approximately nine million shares of common stock. The company said the retirement of these notes would result in an annual savings of approximately $3.25 million in interest expense, which would be realized over the full year beginning in fiscal 2002. As of the date of that release, Equinix said it had reduced its interest payments on the retired senior notes beginning January, 2002 through December, 2007 by $19.5 million. Together with the $25 million in principal payments that would otherwise have come due in December 2007, Equinix said it had reduced its debt service on the retired senior notes by nearly $45 million. With the transfer of the nine million shares to the former holders of the $25 million of retired notes, the total number of common stock shares outstanding upon completion of the exchange was approximately 89 million shares.

On June 12, Equinix said that it had retired an additional $10 million of the 13% notes; including the $42 million of senior notes which were retired in debt exchanges in the first half of 2002, that brought the total face amount of the notes which had been retired at significant discounts as of that date to $52 million. The company said that since October, 2001, it had reduced its total outstanding debt by $97 million, including the retirement of $45 million in senior credit facility debt in October, 2001. The debt reductions reduced the company's annual interest expense by nearly $10 million, with the company's total debt obligations, including principal and interest over the term of the debt, to be reduced by approximately $150 million.

Equinix additionally announced the filing of a proxy statement with the Securities and Exchange Commission calling for a special stockholders' meeting to approve the potential issuance of up to 15 million shares of common stock in exchange for the retirement of additional senior notes. The total number of common stock shares outstanding as of the date of that announcement was 96.9 million shares. Equinix said that the ability to issue additional common shares would give it greater flexibility and options to de-leverage the company. While Equinix said it did not expect to transact any additional debt-for-equity exchanges in the near term at the then-current stock trading level, the availability of additional authorized shares would enable the company to take advantage of favorable debt-for-equity exchange opportunities as market conditions improved.

On Nov. 26, Equinix said that it was offering to exchange cash and common stock for all $147.2 of its 13% senior notes due in 2007 that remain outstanding (out of the originally issued $200 million, which was reduced to present levels by earlier equity-for-debt exchanges).

The company said that it had already received offers to exchange from holders of $103.7 million of the notes, or approximately 70% of the notes currently outstanding. It did not publicly announce the terms of the exchange offer, which were contained in the official Offer to Exchange and Consent Solicitation Statement delivered to the noteholders. It said that the amount of cash to be exchanged and the amount of common stock shares to be issued in exchange for each principal amount of notes tendered would vary, depending on the aggregate principal amount of the notes that are tendered.

The tender offer was initially set to expire at 5 p.m., ET on Dec. 24 (this was subsequently extended). Tenders of notes could be withdrawn at any time prior to the deadline.

Equinix further said that as a result of the tender offer, it would not be paying the scheduled Dec. 1 interest payment on the outstanding notes. The company said that its bondholders and senior lenders continue to work with Equinix to afford it sufficient time and flexibility to effect the proposed acquisitions and financing as announced on Oct. 2.

On Dec. 11, Equinix announced that it had scheduled a special stockholder meeting to vote on its previously announced plans to issue shares in connection with the financing and acquisitions of i-STT, a wholly-owned Internet infrastructure services subsidiary of Singapore Technologies Telemedia Pte Ltd (ST Telemedia), and Pihana Pacific, a leading provider of neutral Internet exchange data center services and managed e-infrastructure services in Asia-Pacific, to form the largest global network neutral Internet exchange services company.

The stockholders' meeting will be held on Dec. 30. In New York, subject to possible further extension.

Sinclair reaches threshold on tender for 8 ¾% '07 notes

Sinclair Broadcast Group, Inc. (B2/B) said on Wednesday (Dec. 11) that holders of a majority of its outstanding 8¾% senior subordinated notes due 2007 had tendered their notes and had delivered consents to proposed indenture changes under the terms of the company's previously announced tender offer for those notes and the related consent solicitation.

Sinclair said that as of the initially announced consent deadline of 5 p.m. ET on Tuesday (Dec. 10), holders of approximately 80% of the outstanding notes had tendered them, fulfilling the condition that the indenture amendments be approved. Sinclair said that it intends to promptly execute a supplemental indenture incorporating the proposed amendments, as described in the official Offer to Purchase. Although the supplemental indenture will have then been executed, the proposed amendments will not become operative unless Sinclair completes the tender offer. If the proposed amendments become operative, the holders of untendered Notes will be bound thereby.

Although Sinclair received the requisite amount of consents by the consent deadline to approve the indenture changes, the company also said that it was extending the consent deadline (by which holders must tender their notes and deliver their consents in order to be eligible to receive a consent payment as part of their total consideration for the notes ) to 5 p.m. ET on Wednesday (Dec. 11), subject to possible further extension, while the tender offer expiration deadline remains Dec. 30, also subject to possible extension.

J.P. Morgan Securities Inc. (call 800 245-8812) is the dealer-manager for the tender offer and consent solicitation. D.F. King & Co., Inc. (call 800 848-3416) is the information agent.

AS PREVIOUSLY ANNOUNCED, Sinclair Broadcast Group, a Baltimore-based television station group owner, said on Dec. 2, that it was beginning a tender offer for all of its outstanding 8¾% senior subordinated notes due 2007, and was also soliciting the consent of noteholders of record (as of Dec. 2) to proposed amendments that would eliminate substantially all of the restrictive covenants and certain events of default from the notes' indenture. Holders tendering their notes would be required to consent to the proposed amendments, and holders consenting to the proposed amendments would be required to tender their notes.

Sinclair initially set a consent deadline of 5 p.m. ET on Dec. 10, and an expiration deadline of 12 midnight ET on Dec. 30, both subject to possible extension (the consent deadline was subsequently extended). It said that holders validly tendering their notes and delivering consents by the consent deadline would receive total consideration of $1,043.75 per $1,000 principal amount of notes tendered, which includes a $20 per $1,000 principal amount consent payment. Holders validly tendering their notes after the consent deadline would only receive the tender consideration of $1,023.75 per $1,000 principal amount, and would not receive the consent payment.

Sinclair said it currently intends to issue on Dec. 31 a notice of redemption for all untendered 8¾% notes. It will redeem such notes at a redemption price of $1,043.75 per $1,000 principal amount, under the terms and conditions of the notes' indenture.

The company said it intends to fund the tender offer, and all related costs and expenses, with the net proceeds of an offering of new senior subordinated notes, an amendment to its bank credit facility to permit additional borrowings (which may then be repaid from the proceeds of a subsequent issuance of new senior subordinated notes), the net proceeds of other public or private equity or debt issuances, and/or cash on-hand.

The tender offer is conditioned upon the proposed amendments being adopted, Sinclair completing arrangements for financing the purchase of the notes and other general conditions.

On Dec. 3, Sinclair announced plans to sell $150 million of new 8% senior subordinated notes due 2012 as an add-on to its existing 8% notes, with the Rule 144A transaction expected to take place later in the month of December.

Separately, Sinclair said on Nov. 8 that it had notified the trustee for its $200 million of outstanding 9% senior subordinated notes due 2007 that it would redeem the issue in full on Dec. 9, paying the aggregate principal amount plus the associated call premium and all accrued interest.

Sinclair said that it would fund the redemption using the proceeds of its recent add-on sale of $125 million 8% senior subordinated notes due 2012, plus available working capital (which would include a draw on Sinclair's bank credit facility).

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