Crown Castle gets consents from 10 3/8% and 11¼% noteholders

New York, Dec. 10 - Crown Castle International Corp. (B3/B-) said it had received the necessary noteholder consents to proposed indenture changes to its 10 3/8% senior discount notes due 2011 and 11¼% senior discount notes due 2011 as part of the company's previously announced tender offer and consent solicitation for the notes.

It said that the consent solicitation deadline expired as scheduled at 5 p.m. ET on Dec. 9 without extension, and that all tenders and consents delivered prior to that time have now become irrevocable.

As of the consent deadline, $424.3 million of the 10 3/8% notes, or 94.5% of the outstanding principal amount at maturity, had been tendered, along with $190.4 million of the 11¼% notes, or 93.7% of the principal amount.

Crown Castle said it plans to enter into a supplemental indenture for each series of notes incorporating the applicable amendments. However, the amendments will not become effective unless and until the two series of notes are accepted for payment by the company. Once the proposed amendments become effective, the holders of all of the 10 3/8% and 11¼% notes which might still be outstanding will be bound by the amended language.

The underlying tender offer for the notes meantime continues and is scheduled to expire on Dec. 23.

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 and use the proceeds 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 principal amount of new 7½% senior notes due 2013 at 96.603.

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.

It set a now-expired consent deadline of 5 p.m. ET on Dec. 9, and said the tender offer would expire at 5 p.m. ET on Dec. 23. The company said the pricing date for the two offers would be on the third business day before the expiration (currently Dec. 18), with all deadlines subject to possible extension. 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 initially 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, and said that 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.

On Dec. 4, Crown Castle said it was increasing the redemption prices on the two series of notes, saying the fixed spread over the respective reference security yields would now be 50 basis points, rather than the originally announced 100 bps. It said the increase would apply to any notes previously tendered as well as any to be subsequently tendered.

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 now-expired consent deadline and thus giving consent to indenture changes aimed at eliminating substantially all of the restrictive covenants and certain events of default under the notes' respective indentures, and making certain other amendments to the indentures. The company said holders could not tender their notes without delivering a consent and could not deliver a consent without tendering their notes. Holders tendering after the consent deadline will not receive the consent payment as part of their consideration.

The company said that the closing of each tender offer would be subject to certain conditions, including the now fulfilled conditions of the closing by the Crown Castle of its previously announced offering of 7½% senior notes due 2013, which took place on Dec. 2, and the receipt of the required consents from holders of the existing notes to amend the notes' Indentures.

Crown Castle meantime is continuing to run its completely separate tender offer and consent solicitation for all of its outstanding 9% senior notes due 2011 and 9½% senior notes due 2011, which is scheduled to expire on Jan. 6.

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 at 800 322-2885 or collect at 212 929-5500).

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