RCN tenders for 7.375% convertibles

By Jennifer Chiou

New York, April 27 - RCN Corp. announced the start of a tender offer for any and all of its $125 million of 7.375% convertible second-lien notes due 2012.

The Herndon, Va.-based provider of video, data and voice services is also soliciting consents to amend the note indenture to eliminate substantially all of the restrictive covenants and events of default and to release all of the collateral securing the second-lien notes.

For each $1,000 principal amount, the company said it will pay $1,133 in cash plus accrued interest to, but excluding, the date on which the notes are purchased. Noteholders who tender will also receive 42.63 warrants to purchase shares of RCN common stock, with an exercise price equal to $25.16.

The offer ends at 9:15 a.m. ET on May 25.

RCN is seeking consents from holders of a majority of notes. The company also requires sufficient financing and the satisfaction or waiver of the other conditions to the tender offer on or prior to the expiration date.

The company noted that this transaction represents the first step in its previously announced initiative to pursue a return of capital to stockholders in the range of $350 million to $400 million.

HSBC Bank USA, NA is the depository (call collect 703 434-8430 or 800 662-9844).

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