Arch Wireless to redeem $2.7 million of 12% notes

New York, Nov. 6 - Arch Wireless, Inc. said that its wholly owned Arch Wireless Holdings, Inc. subsidiary has notified The Bank of New York, as trustee of its 12% subordinated secured compounding notes due 2009, of its intentions of making a mandatory redemption payment of $2.7 million compounded value of the notes on Nov. 17, as is required by provisions of the notes' indenture relating to excess cash flow at Sept. 30.

Arch said that upon completion of the redemption, and a previously announced optional redemption of $11.8 million compounded value of the notes scheduled to take place on Nov. 20, Arch will have outstanding $75 million in aggregate compounded value of the 12%.

Arch additionally will make a mandatory semi-annual cash interest payment of $5.4 million on Nov. 17 to holders of the 12% notes.

As previously announced, Arch, a Westborough, Mass.-based provider of wireless messaging services, issued $100 million of the notes on May 29, 2002, upon completion of the company's reorganization and they had a compounded value of $111.9 million prior to the beginning of repurchases last month, which brought the outstanding compounded value down to $89.5 million.

Arch said on Oct. 21 that its subsidiary had repurchased $22.4 million compounded value of the notes in a series of transactions that closed on various dates between Oct. 3 and Oct. 17. Arch paid $22.9 million for the notes, plus $1.1 million of accrued interest. It said the buybacks followed an amendment to the notes' indenture permitting periodic market purchases or individually negotiated purchases of up to 20% of the notes. Arch said that 20% of the notes had now been repurchased.

Arch also announced at that time its plans for redeeming the further $11.8 million compounded value of the notes on Nov. 20.

Previously, Arch had fully redeemed $200 million of 10% senior subordinated secured notes due 2007 which had been issued in May, 2002 after its reorganization, via a series of optional and mandatory redemptions which concluded in early September.

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