Crown Castle increases purchase price for 10 3/8% and 11¼% notes, plans tender for 9% notes

New York, Dec. 4 - Crown Castle International Corp. (B3/B-) said it was increasing the price that it will pay to noteholders tendering their 10 3/8% senior discount notes due 2011 and 11¼% senior discount notes due 2011 under the company's previously announced tender offer and consent solicitation.

Crown Castle - which will set the exact prices several days before the scheduled expiration date of the tender offer using a formula involving a fixed spread over the yield on the pricing date of certain reference securities - said that the fixed spread over the reference security yields will now be 50 basis points rather than the originally announced 100 bps, amounting to a higher price for the notes.

This increase will apply to any notes that were previously tendered as well as any subsequently tendered. All other terms of the tender offers and consent solicitations remain the same. The consent deadline remains Dec. 9 and the tender offer will expire on Dec. 23.

Meanwhile, Crown Castle said Thursday it plans a tender in the near future for its 9% senior notes using proceeds of a $300 million 10-year note offering price during the session to yield 7.681%.

As previously announced, Crown Castle, a Houston-based communications antenna tower owner, said on Nov. 17 that it would sell $300 million of senior notes due 2014 in a private Rule 144A transaction and use the proceeds from the offering, together with existing cash balances, to tender in the near term for its outstanding 10 3/8% and 11¼% notes (high yield syndicate sources said that later in that session, the company sold $300 million of new 7½% senior notes due 2013).

In its most recent 10-Q quarterly filing, the company reported that as of Sept. 30, it had $390.905 million of the 10 3/8% notes outstanding, net of discount, and had $170.777 million of the 11¼% notes outstanding, net of discount.

Crown Castle announced on Nov. 24 that it was tendering for the 10 3/8% and 11¼% notes and was soliciting noteholder consents to proposed changes in the notes' indentures.

The company said the pricing date for the two offers would be on the third business day before the expiration. Notes tendered before the consent deadline could be withdrawn at any time before the deadline, but not afterward. Notes tendered after that could not be withdrawn.

Crown Castle said that it would set the consideration it would pay for the 10 3/8% notes using a formula based on the redemption price on the first call date ($1,051.87 per $1,000 principal amount), using a 100-basis point spread over the yield on the pricing date of the reference security, the 3¼% Treasury note due May 31, 2004 (the spread over the yield was subsequently lowered).

It would set the consideration it would pay for the 11¼% notes based on the redemption price on the first call date ($1,056.25 per $1,000 principal amount), using a 100 basis-point spread over the yield on the pricing date of the 7¼% Treasury note due Aug. 15, 2004 (the spread over the yield was subsequently lowered).

The total consideration for both series of notes will include a consent payment of $20 per $1,000 principal amount at maturity for those holders tendering by the consent deadline and thus giving consent to indenture changes that would eliminate substantially all of the restrictive covenants and certain events of default under the notes' respective indentures, and make certain other amendments to the indentures. Holders cannot tender their notes without delivering a consent and cannot deliver a consent without tendering their notes. Holders tendering after the consent deadline will not receive the consent payment as part of their consideration.

J.P. Morgan Securities Inc. is the dealer-manager and solicitation agent (contact Brian Tramontozzi at 212 270-9153). MacKenzie Partners, Inc. is the information agent (contact Steve Balet 800 322-2885 or collect at 212 929-5500).

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