Nextel cut additional bond debt during fourth quarter

Nextel Communications, Inc. (B3/B+) said on Thursday (Feb. 20) that it had retired $3.2 billion in debt and preferred obligations in 2002, thus increasing its stockholders' equity by $3.4 billion, from a deficit to more than $2.8 billion, and also "significantly" improving its financial flexibility.

Nextel said in its fourth-quarter earnings announcement that those de-leveraging activities in 2002 will enable the company to avoid payments of approximately $5.4 billion in principal, interest and dividends over the life of these securities.

For the fourth quarter ended December 31, 2002, Nextel retired $588 million in principal amount of its outstanding debt and mandatorily redeemable preferred stock in exchange for approximately 28 million newly issued shares of class A common stock and approximately $154 million in cash. Nextel further said that it may, "from time to time as it deems appropriate," enter into similar transactions, "which in the aggregate may be material."

AS PREVIOUSLY REPORTED, Nextel, a Reston, Va.-based wireless telecom operator, said on July 16, 2002 that as of June 30, it had retired nearly $1.1 billion in debt and mandatorily redeemable preferred stock in exchange for approximately 61 million newly issued shares of Class A Nextel common stock and approximately $295 million in cash. Nextel said as part of its second-quarter earnings release that since June 30, it had entered into agreements to repurchase approximately $400 million of debt in exchange for about $205 million in cash. The company said that this further reduction would result in a gain to be reflected in the third quarter results. Taken together, Nextel said, these negotiated transactions, totaling $1.5 billion in face amount, would allow Nextel to avoid about $2.5 billion in total future principal, interest, and dividend payments. Nextel did not specify which particular portion of its approximately $16 billion of debt was being taken out in the aforementioned transactions. The company further said that it might, from time to time, as it deems appropriate, enter into similar transactions "which in the aggregate may be material."

On Aug. 14, Nextel said that it had retired a further $733 million principal amount of debt and preferred securities since June 30. The company said in its second-quarter 10-Q filing with the Securities and Exchange Commission that the latest buybacks brought to $1.83 billion the total of debt and preferred securities retired up to that point in 2002. It said that the latest repurchases were of $507 million principal amount at maturity of notes with a book value of $500 million, and $226 million face amount of mandatorily redeemable preferred stock with a book value of $229 million. Nextel paid $205 million in cash and issued 33 million shares of class A common stock to buy back the securities. It said that it might make further repurchases.

On Nov. 15, Nextel said in its 10-Q filing with the SEC that it had ended 2001 and had begun 2002 with $ 13.864 billion of total domestic long-term debt outstanding, including $9.345 billion of senior notes, $4.5 billion of indebtedness under its bank credit facility, as well as $1.001 billion of capital lease and finance obligations, and $2.114 billion of mandatorily redeemable preferred stock obligations.

For the nine months ended Sept. 30, 2002, Nextel had purchased and retired a total of $1.701 billion in aggregate principal amount at maturity of its outstanding senior notes and $897 million in aggregate face amount of its outstanding preferred stock obligations, in exchange for $689 million in cash and 144 million shares of Nextel class A common stock valued at $840 million.

Fisher Scientific to redeem remaining 9% '08 notes

Fisher Scientific International Inc. (B2/B) said on Thursday (Feb. 20) that it had issued a redemption notice for the remaining $400 million of its 9% senior subordinated notes due 2008 (out of the $600 million originally issued). The notes will be redeemed at a price of 104.50% of par ($1,045 per $1,000 principal amount), plus accrued interest up to the redemption date. Fisher expects the redemption to be completed by March 21.

It said that the redemption will be funded with the proceeds of its senior secured credit facility, which was completed last week.

Fisher said that earlier in the month, it had redeemed $200 million of the 9% notes with the proceeds of its recently completed $200 million sale of 8 1/8% senior subordinated notes due 2012

AS PREVIOUSLY ANNOUNCED: Fisher Scientific, a Hampton, N.H. supplier of scientific equipment, said on Jan. 9 that it would sell $200 million of the 8 1/8% notes as an add-on to its existing $150 million of 8 1/8% debt, and would use the proceeds from the offering to repay a portion of the outstanding 9% notes. High yield syndicate sources heard that the company had sold the $200 million of the new senior subordinated notes percent senior subordinated notes due 2008 later that session at a price of 104.

On Feb. 3, Fisher said in its fourth-quarter earnings announcement that it expected to soon close a new $550 million senior secured credit facility, which would include a five-year, $150 million revolving credit facility and a seven-year, $400 million term-loan facility.

It said that the proceeds from the credit facility, and from the previously announced 8 1/8% add-on note sale, which settled on Jan. 14, would be used to refinance the 9% notes, which became callable after Jan. 31.

Fisher said that excluding approximately $45 million of one-time charges associated with the refinancing, $27 million in cash, the company estimates that the refinancing would provide $12 million to $14 million of pretax savings this year.

Wickes extends exchange offer for 11 5/8% '03 notes

Wickes Inc. (Ca) said on Thursday (Feb. 20) that it had extended its previously announced offer to exchange new debt for its outstanding 11 5/8% senior subordinated notes due 2003 to 5 p.m. ET on Feb. 25, subject to possible further extension, from the previous deadline at 5 p.m. ET on Feb. 19.

Wickes said that to date, it has received tenders from holders of approximately 67% of the outstanding aggregate principal amount of the 11 5/8% notes, including the three largest holders. That amount was unchanged from the previously announced noteholder participation level.

The company said that it was "working diligently" to complete the refinancing of its senior credit facility over the next week, which would allow Wickes to close simultaneously on the exchange offer and on the new revolving credit facility.

D. F. King & Co., Inc. (call 800 859-8508 toll-free in the U.S.) is the information agent for the exchange offer. The exchange agent is HSBC Bank USA (call 718 488-4475 attn: Paulette Shaw). Investors with further questions about the exchange transaction can call Wickes at 847 367-3414.

AS PREVIOUSLY ANNOUNCED, Wickes, a Vernon Hills, Ill.-based distributor of building materials and manufacturer of value-added building components, said on Dec. 20, 2002, that it had begun an offer to exchange new debt for its $63.956 million of outstanding 11 5/8% notes. Wickes said it would exchange an equal principal amount of its new senior secured notes due 2005 for any and all of the existing bonds.

The company said the new notes would initially pay interest at the same 11 5/8% rate as the existing notes from the date of issuance through Dec.15, 2003 and at 18% thereafter. Interest at 11 5/8 percent will be paid currently in cash, while the balance will be paid currently in cash to the extent the company has excess cash flow (as defined in the indenture governing the new senior secured notes), and will accrue to the extent not paid in cash.

The new notes would be secured by liens on the company's owned real estate and equipment, subject to the priority of the liens to the company's senior lenders, and will rank equally with the company's revolving credit agreement; they will rank senior to the existing subordinated notes.

Wickes also said it was soliciting consents from the holders of the existing subordinated notes to amendments to the notes' indenture that would eliminate most of the covenants contained therein.

It said that the three largest noteholders, representing approximately 40% of the outstanding subordinated notes, had agreed to exchange their notes under the terms of the exchange offer and to consent to such amendments.

In order for such amendments to become effective, consents would have to be obtained from the holders of a majority of the outstanding subordinated notes.

The company initially said the exchange offer would expire at 5 p.m. ET on Jan. 22 (this was subsequently extended). It is not subject to any minimum amount of subordinated notes being exchanged. But the closing of the exchange offer is subject to the company obtaining the consent of its senior lenders or the refinancing of its senior debt with a new senior lender who consents to the exchange offer. Wickes warned that it could give no assurances that such consent or refinancing will be obtained, although it said that talks had begun with a potential new senior lender to refinance the senior debt.

Wickes additionally said that its exchange offer contemplates a $4.98 million mandatory redemption in cash scheduled for the new senior secured notes' first interest payment date, March 17, 2003, as a result of the previously announced Lanoga sale proceeds (on Oct. 30, Wickes said it had agreed to sell substantially all of the assets of its operations in Wisconsin and northern Michigan to Lanoga Corp., through its United Building Centers division. Completion of the sale, at a price of 55.253 million, plus an additional net amount of approximately $20 million for the value of the inventory and accounts receivable of the business operations sold, was announced on Dec. 16).

The mandatory redemption proceeds, which will be applied to the new Senior Secured Notes based upon the 85% applicable optional redemption price, will be shared pro-rata based on the aggregate principal amount of existing senior subordinated notes exchanged.

On Jan. 23, Wickes said that it had extended the exchange offer to 5 p.m. ET on Feb. 19, subject to possible further extension, from the original deadline at 5 p.m. ET on Jan. 22.

Wicks said that as of Jan. 23, it had received tenders from the holders of approximately 67% of the outstanding aggregate principal amount of the 11 5/8% notes, an amount that includes tenders from the three largest holders, representing approximately 40% of the outstanding notes, who had previously agreed to exchange their notes under the terms of the exchange offer.

Millicom Cellular extends exchange offer for 13½% ' 06 notes

Millicom International Cellular SA (Caa3) said on Thursday (Feb. 20) that it had extended its previously announced offer to exchange new debt for its outstanding 13½% senior subordinated discount notes due 2006, and the related consent solicitation. The offer was extended to 5 p.m. ET on Feb. 28, subject to possible further extension, from the original Feb. 20 deadline.

Millicom also confirmed that it has been notified that an ad hoc committee of bondholders has been formed and has retained Houlihan Lokey Howard & Zukin as financial advisers and Orrick, Herrington & Sutcliffe as legal advisers. Millicom said it has had conversations with this ad hoc committee, and is extending the exchange offer and consent solicitation "to facilitate the continued dialogue."

The company said that the rights of withdrawal for those bondholders who have already tendered their acceptance to the exchange offer and consent solicitation shall continue until the new expiration date, in accordance with the terms of the private offering documents.

AS PREVIOUSLY ANNOUNCED: Millicom, a Bertrange, Luxembourg -based telecommunications investor, said on Jan. 21 that it had begun an offer to exchange two issues of new debt for all of the outstanding 13½% notes, and had also begun a related solicitation of noteholder consents to proposed indenture changes.

Millicom initially said that the exchange offer and consent solicitation would expire at 5 p.m. ET on Feb. 20 (this was subsequently extended).

It said that the exchange offer was being made in a private offering only to U.S. holders of the existing notes who could be considered either "qualified institutional buyers" or "accredited investors" or to holders who are not "U.S. persons," as all of these terms are defined by the Securities Act of 1933.

The company said that holders of the existing notes validly tendering them for exchange will receive $600 of Millicom's newly issued 9% senior notes due 2005, plus $75 of Millicom's newly issued 4% senior convertible PIK (payment-in-kind) notes due 2005 per $1,000 of the existing notes.

It noted that the new 4% notes would be convertible into Millicom's common stock at any time after April 1 at a conversion price of $5 per share, which could result in a dilution to existing Millicom stockholders of approximately 22% (assuming the company issues no additional PIK notes in lieu of cash interest). At their maturity or upon their redemption, Millicom - at its option - may pay the then-outstanding principal amount of the 4% Notes in whole or in part, plus the accrued and unpaid interest on the notes, either in cash or in shares of its common stock.

Millicom said that its wholly owned Millicom International Operations BV subsidiary will irrevocably and unconditionally guarantee both the new 9% notes and the new 4% notes.

Marsh Supermarkets bought back 8 7/8% '07 notes in fiscal third quarter

Marsh Supermarkets Inc. (B2) said Tuesday (Feb. 18) that it had purchased and retired $15 million of its 8 7/8% senior subordinated notes due 2007 during the twelve weeks ended Jan. 4.

Marsh, an Indianapolis-based supermarket chain operator, said in its 10-Q report to the Securities and Exchange Commission for the fiscal third quarter that the repurchases had taken place in various transactions at 91.25% to 93% of face value.

Marsh said that the transactions resulted in a gain of $1 million. It said that the balance of senior subordinated notes remaining outstanding as of Jan. 4 (out of the originally issued $150 million) was $135 million.

Cumulus Media bought 10 3/8% '08 notes in fourth quarter

Cumulus Media Inc. said on Tuesday (Feb. 18) that it had completed the repurchase of $27.4 million in aggregate principal amount of its 10 3/8% senior subordinated notes due 2008 during the fourth quarter.

Cumulus, an Atlanta-based radio station group owner, said that it had bought back the notes for $29.6 million, including repurchase premiums. It added that subsequent to Dec. 31, 2002 - when the quarter ended - and during the month of January 2003, it had repurchased an additional $30.1 million of the notes for $32.5 million, including repurchase premiums.

Pro forma for the repurchases completed in January, Cumulus' outstanding 10 3/8% notes balance as of Dec. 31 was $102.5 million.

Cumulus further said that during the quarter, it had successfully negotiated and completed the repurchase of 52,819 shares of its Series A Preferred Stock for approximately $60 million, including redemption premiums. As of Dec. 31, Cumulus' outstanding Series A Preferred Stock balance was $14.2 million, representing 14,168 shares outstanding.

In January, the company drew $43 million on its existing $112.5 million revolver under its credit facility. Proceeds from these borrowings were used to fund the previously announced acquisitions of stations in Ft. Walton Beach, Fla. and Macon, Ga. It said that as of Dec. 31 and pro forma for the repurchases of the 10 3/8% notes completed in January, and the Macon, nd Ft. Walton Beach acquisitions that also were completed in January, Cumulus had net long-term debt and preferred stock of $447.3 million, consisting of $330.5 million in bank debt, $102.5 million in remaining outstanding 10 3/8% notes, $200,000 in other debt and $14.2 million in Series A Preferred Stock. Its ratio of net long-term debt and preferred stock (including the 10 3/8% notes repurchases) to trailing 12-month pro forma EBITDA as of Dec. 31 is approximately 5.2x.

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