Arch Wireless to redeem further 12% notes

New York, Nov. 26 - Arch Wireless, Inc. said that its wholly owned Arch Wireless Holdings, Inc. will redeem $15 million compounded value of its 12% subordinated secured compounding notes due 2009 on Dec. 31.

The redemption will be the latest in a series of mandatory and optional redemptions in recent months. Upon completion of the Dec. 31 optional redemption, Arch Wireless Holdings expects to have outstanding $60 million compounded value of the 12% notes.

As previously announced, Arch, a Westborough, Mass.-based provider of wireless messaging services, issued $100 million of the notes on May 29, 2002, upon completion of the company's reorganization and they had a compounded value of $111.9 million prior to the beginning of repurchases in October, which brought the outstanding compounded value down to $89.5 million.

Arch said on Oct. 21 that its subsidiary had repurchased $22.4 million compounded value of the notes in a series of transactions that closed on various dates between Oct. 3 and Oct. 17.

Arch paid $22.9 million for the notes, plus $1.1 million of accrued interest. It said the buybacks followed an amendment to the notes' indenture permitting periodic market purchases or individually negotiated purchases of up to 20% of the notes. Arch said that 20% of the notes had by then been repurchased. Arch also announced at that time its plans for redeeming the further $11.8 million compounded value of the notes on Nov. 20.

On Nov. 21, Arch said that its subsidiary had completed the previously announced optional redemption of $11.8 million compounded value of the notes, and said that the unit had made a mandatory redemption payment of $2.7 million compounded value of the notes on Nov. 17. The payment was required by provisions of the 12% notes' indenture relating to excess cash flow as of Sept. 30.

The company said that with the completion of the latest round of optional and mandatory redemptions, Arch Wireless Holdings had $75 million in aggregate compounded value of 12% notes still outstanding.

Previously, Arch had fully redeemed $200 million of 10% senior subordinated secured notes due 2007 which had been issued in May 2002 after its reorganization, via a series of optional and mandatory redemptions which concluded in early September.

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