NII buys $180.8 million 13% notes in tender

New York, March 8 - NII Holdings Inc. said it bought $180.768 million face amount or 99.97% of NII Holdings (Cayman) Ltd.'s 13% senior secured discount notes due 2009 in its tender offer.

NII also said amendments to the note indenture had become effective.

In total, NII paid $210.594 million to purchase the notes.

On Feb. 19, NII Holdings said it received sufficient consents to execute a supplemental indenture incorporating those changes but that they would not become operative until NII Holdings (Cayman) accepts and pays for all of the 13% notes validly tendered pursuant to the offer.

As of the consent deadline at 5 p.m. ET on Feb. 18, holders of 99.9% of the notes had tendered them and had delivered valid consents to the proposed indenture changes.

The company also has extended the consent deadline to coincide with the offer expiration deadline at midnight ET on March 3, subject to possible further extension. Accordingly, all tendering holders will now be paid the same total compensation for their notes - $1,165 per $1,000 principal amount at maturity of notes tendered and accepted for purchase, including a $20 per $1,000 principal amount. All other terms and conditions of the tender offer and consent solicitation as originally announced are unchanged.

As previously announced, NII Holdings, a Reston, Va.-based telecommunications company that markets Nextel Communications Inc.'s wireless phone service in Latin America (formerly known as Nextel International Inc. before reorganizing under Chapter 11 in 2002), said on Feb. 4 that its wholly owned NII Cayman subsidiary had begun a cash tender offer for all of the unit's 13% notes and was also soliciting noteholder consents to proposed indenture changes that would eliminate substantially all restrictive covenants and certain event of default provisions.

The company initially set 5 p.m. Feb. 18 as the consent deadline (this was subsequently extended), and said that the tender offer would expire at midnight ET on March 3, with both deadlines subject to possible extension.

NII said that NII Cayman would pay total consideration of $1,165 per $1,000 principal amount at maturity of notes validly tendered by the consent deadline and for which consents have been validly delivered and not subsequently withdrawn and are accepted for payment. Total consideration will include a $20 per $1,000 principal amount consent payment.

It initially said that holders tendering their notes after the consent deadline but before the offer expires would receive tender consideration of $1,145 per $1,000 principal amount but would receive no consent payment (the company subsequently extended the period during which consents could be delivered to coincide with the remaining time on the tender offer).

NII Holdings said that NII Cayman would finance the tender offer with intercompany loans from its parent and cash on hand. NII Holdings intends to use a portion of its proceeds from its recent issuance of $250 million of new 2 7/8% convertible notes due 2034 to fund its intercompany loans to NII Cayman.

Completion of the tender offer and NII Cayman's obligation to accept for purchase and to pay for validly tendered 13% notes is conditioned on, among other things, the satisfaction of a requisite consents condition and a minimum tender condition.

Citigroup was dealer manager for the offer (call the Liability Management Group at 212 723-6106 or 800 558-3745). Global Bondholder Services Corp. was the information agent and depositary (call 866 470-4100).

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