Rural Cellular plans revolver draw to ensure access to borrowings

By Sara Rosenberg

New York, Oct. 31 - Rural Cellular Corp. plans to draw down $58 million under its revolving credit facility on Monday to ensure that the company has access to the funds, according to a news release.

This precaution is being taken because if six or more dividend payments are in arrears on its 11 3/8% senior exchangeable preferred stock, the company may not be able to incur additional indebtedness, including under its revolver.

Furthermore, on Monday, the Alexandria, Minn.-based wireless communication services provider announced it will offer $175 million of senior subordinated floating-rate notes due 2012.

Proceeds from the proposed bond offering will be used to redeem all of the company's outstanding 9 5/8% senior subordinated notes due 2008 and for general corporate purposes, including replenishing cash used to pay preferred stock dividends and repurchasing preferred securities.

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