RCN creditors extend forbearance agreements to April 1

By Jeff Pines

Washington, March 15 - RCN Corp.'s senior secured lenders and ad hoc senior noteholders committee agreed to extend their forbearance agreements until April 1 while they work on a financial restructuring, the company said in a news release.

RCN, which missed the $14.2 million Feb. 15 payment on its 9.8% senior discount notes due 2008, said it will not make the payment by the expiry of the grace period on March 15.

In addition, the company missed the Jan. 15 payment on its 10 1/8% senior notes due 2008.

The forbearance agreements do not bind bondholders who are not members of the committee. The non-members could throw the company into default and require the company to pay up on its credit facilities and two series of notes, it said.

The Princeton, N.J.-based telecommunications provider has repeatedly said it does not have the cash it would need to pay them off.

RCN also said it will file its annual report on Form 10-K with the Securities and Exchange Commission late, but the company estimates it should be able to file it by March 30.

On March 12, RCN said it hired Blackstone Group LP to help it with its continuing negotiations.

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