FiberTower opts for PIK interest for 9% convertibles

By Jennifer Chiou

New York, March 27 - FiberTower Corp. announced that it has elected to pay the May 15 interest payment on its 9% convertible senior secured notes due 2012 in kind.

As of Dec. 31, the carrying value of the notes is $430.3 million, including $28.9 million in accreted value.

The company added that it has the option of making any or all of the four semiannual interest payments due in 2009 and 2010 with additional notes in lieu of cash.

FiberTower said that the interest rate applicable to any interest payments made in additional notes will be 11%.

San Francisco-based FiberTower is a provider of backhaul and access services to communications companies.

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