SpectraSite starts roadshow for $150 million seven-year notes

By Paul Deckelman

New York, May 9 - SpectraSite Inc., plans to bring a $150 million offering of seven-year senior notes to market via joint bookrunning managers Lehman Brothers and Citigroup, high yield syndicate sources said Friday.

The notes will be non-callable for the first three years after issue.

The deal was hitting the road Friday for a marketing campaign that would run through May 16.

Proceeds of the Rule 144A offering will be used to repay a portion of the company's existing bank debt.

SpectraSite, a Cary, N.C.-based communications antenna tower operator, reorganized following a Chapter 11 filing with the U.S. Bankruptcy Court in Raleigh, N.C. on Nov. 15, 2002. In the reorganization, the holders of approximately $1.729 billion principal amount of its former 12½% senior notes due 2010, 6¾% senior convertible notes due 2010, 10¾% senior notes due 2010, 11¼% senior discount notes due 2009, 12 7/8% senior discount notes due 2010 and 12% senior discount notes due 2008 received pro rata shares of the reorganized company's new common stock, while holders of the old common received equity warrants.

Spectrasite emerged from reorganization on Feb. 10 with $1 billion of credit facility debt at its SpectraSite Communications Inc. operating company subsidiary, of which $707 million had been drawn as of March 31.

On Thursday, SpectraSite reported earnings for the first quarter ended March 31. Net income for the quarter was $343.3 million, versus a net loss of $452.5 million during the first quarter of 2002. The company's net income during the latest quarter was primarily affected by a gain on the early extinguishment of debt related to its emergence from Chapter 11.

EBITDA (which the company defines as operating income or loss before depreciation, amortization, accretion and non-cash compensation charges), increased to $38.2 million during the first quarter of 2003 from $26.3 million during the same period in the prior year. Net of the EBITDA contribution of 545 towers in California and Nevada which were sold to Cingular Wireless in connection with the reorganization, the company's EBITDA was $37.3 million during the first quarter of 2003

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