FiberTower pays May interest on 9% senior secured convertibles in kind

By Susanna Moon

Chicago, Aug. 6 - FiberTower Corp. elected to pay the May interest payment in kind on its 9% convertible senior secured notes due 2012, according to a 10-Q filing with the Securities and Exchange Commission.

This resulted in the issue of an additional $1.5 million of the convertibles in the second quarter.

As previously noted, the company also has the pay-in-kind option on the next semiannual interest payment due in November. After that, interest must be paid in cash.

The company said on May 7 that it intended to pay the May interest in kind.

The in-kind interest rate is 11% while the cash rate is 9%.

FiberTower elected to pay the May and November 2009 interest payments entirely in kind, which resulted in the issue of an additional $33.5 million of the notes.

The San Francisco-based company is a backhaul and access services provider focused primarily on the wireless carrier market.

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