Eschelon Operating to price $35 million add-on to 8 3/8% notes due March 2010 on Wednesday

By Paul A. Harris

St. Louis, March 21 - Eschelon Operating Co. plans to price a $35 million add-on to its existing 8 3/8% senior secured notes due March 15, 2010 (B3/B-) late Wednesday afternoon, according to an informed source.

An investor conference call will be held Wednesday morning.

Jefferies & Co. has the books for the add-on to the registered notes.

The notes become callable on or after March 15, 2007 at 106.0, after March 15, 2008 at 103.0, and then declining to par on or after March 15, 2009. In addition the notes contain an equity clawback until March 15, 2007 for 35% at 112.0.

Proceeds will be used for general corporate purposed including the acquisition of Oregon Telecom Inc.

The original $100 million issue priced at 84.813 on March 10, 2004 to yield 12%. A $65 million add-on priced on Nov. 19, 2004 at 79.0 resulting in 14.132% yield to worst.

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

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