New issue: Rural Cellular $325 million seven-year notes yield 9 7/8%

By Paul A. Harris

St. Louis, July 23 - Rural Cellular Corp. sold $325 million of senior notes due Feb. 1, 2010 (Caa1/CCC) at par Wednesday to yield 9 7/8%, according to an informed source.

Price talk had widened Wednesday morning to the 9 7/8% area from 9%-9¼%.

Lehman Brothers and Morgan Stanley were joint bookrunners on the Rule 144A/Regulation S deal.

Proceeds will be used to repay bank debt.

The issuer is an Alexandria, Minn.-based company that provides wireless services to rural markets in Midwest, Northeast, South and Northwest.

Issuer:	Rural Cellular Corp.
Amount:	$325 million
Maturity:	Feb. 1, 2010
Security description:	Senior notes
Bookrunners:	Lehman Brothers, Morgan Stanley
Coupon:	9 7/8%
Price:	Par
Yield:	9 7/8%
Spread:	641 basis points over 6½% Treasury due February 2010
Call features:	Callable on Feb. 1, 2007 at 104.938, then 102.469, declining to par on Feb. 1, 2009 and thereafter
Equity clawback:	Until Feb. 1, 2006 for up to 35% at 109.875
Settlement date:	Aug. 1, 2003 (T+7)
Ratings:	Moody's: Caa1
	Standard & Poor's: CCC
Rule 144A Cusip:	781904AG2
Price talk:	9 7/8% area (widened from 9%-9¼%)

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