RCN announces dutch auction tender for up to $1.068 bln debt

By Peter Heap

New York, Sept. 21 - RCN Corp. announced that it will spend up to $250 million in cash to buy back senior notes in a modified dutch auction tender offer. The tender could include as much as $1.068 billion principal amount at maturity of RCN's debt.

The offer to buy is being made by RCN's wholly owned subsidiary RCN Finance, LLC and funds for the buyback will come from RCN's available cash.

RCN Finance is offering cash at prices within designated ranges for five series of its notes.

The offer for each series of notes is independent of the other series.

Notes included and the price ranges are as follows:

Series of notes Price range Aggregate outstanding Maximum principal

(per $1000) principal amount or amount or principal

principal amount at amount at maturity

maturity (in millions) sought (in millions)

10% senior notes $280 - $350 $204 $179

10 1/8% senior

notes $290 - $360 $352 $310

9.80% senior

discount notes $190 - $250 $531 $184

11% senior

discount notes $190 - $250 $224 $79

11 1/8% senior

discount notes $190 - $250 $568 $316

Under the modified dutch auction procedure, RCN will accept the lowest price for each series of notes that will enable RCN to buy notes equal to the maximum available for that series or, if the price is lower, all the notes tendered. RCN will pay a single price for all notes in each series tendered.

The offer will extend at midnight ET on Oct. 19 unless extended.

Dealer managers for the offering are Morgan Stanley & Co., J.P. Morgan Securities Inc. and Greenhill & Co., LLC. Mellon Investor Services LLC is information agent and depositary.

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