Eschelon Operating Co. launches $65 million add-on to 8 3/8% notes

By Paul A. Harris

St. Louis, Nov. 17 - Eschelon Operating Co. began a brief roadshow Wednesday for a $65 million add-on to its 8 3/8% senior secured second-priority notes due March 15, 2010 (existing ratings Caa1/CCC+), according to an informed source.

Pricing is expected to occur Friday.

Jefferies & Co. is the bookrunner.

The notes become callable on March 15, 2007 at 106.0, with the call premium declining annually from that date to 103.0, then par. The notes also contain an equity clawback until March 15, 2007 for 35% at 112.0.

Proceeds will be used to fund the Advanced Telecom acquisition, to repurchase convertible preferred shares and for general corporate purposes.

The original $100 million issue priced at 84.813 to yield 12% on March 10.

Eschelon Operating is a Minneapolis-based voice, data and internet services provider.

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