Hawaiian Telcom downsizes to $500 million, widens talk on all three tranches

By Paul A. Harris

St. Louis, April 26 - Hawaiian Telcom Communications Inc. downsized its three-part bond offering (B-) to $500 million from $550 million on Tuesday, according to market sources.

Meanwhile price talk was revised on all three tranches.

Price talk on the eight-year senior fixed-rated notes, which are non-callable for four years, was revised to 9¾%. Previously the notes had been talked at 9% to 9¼%.

Talk on the eight-year senior floating-rate notes, which are non-callable for two years, was revised to three-month Libor plus 550 basis points. Previously the floating-rate notes were talked at six-month Libor plus 475 to 500 basis points.

Finally price talk of 12¼% to 12½% was heard on the 10-year senior subordinated notes, which are non-callable for five years. Previously the subordinated notes were talked at 150 basis points behind the senior fixed-rate notes.

Tranche sizes remain to be determined.

Pricing is expected on Wednesday.

Goldman Sachs has the physical books for the Rule 144A/Regulation S with registration rights offering. JP Morgan and Lehman Brothers are joint bookrunners. The co-managers are ABN Amro and Wachovia Securities.

Proceeds will be used to help fund the Carlyle Group's $1.65 billion acquisition of Verizon Hawaii from Verizon Communications Inc.

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