New Issue: Avaya seven-year notes upsized to $440 million, yield 11 3/8%

By Paul A. Harris

St. Louis, Mo., March 22 -Avaya, Inc. upsized its offering of seven-year notes to $440 million from $300 million and priced the senior secured notes due April 1, 2009 (Ba2/BB-) Friday at 98.812 to yield 11 3/8%, according to a syndicate source.

"It priced right in the middle" of the 11¼%-11½% price talk, the source commented.

Salomon Smith Barney and Credit Suisse First Boston were joint bookrunners. Dresdner Kleinwort Wasserstein, Deutsche Banc Alex. Brown, JP Morgan and HSBC were co-managers.

The off-the-shelf notes are non-callable for four years.

Proceeds will be used to repay the Basking Ridge, N.J.-based communications services provider's bank debt.

Issuer:	Avaya, Inc.
Amount:	$440 million (increased from $300 million)
Maturity:	April 1, 2009
Type:	Senior secured notes
Bookrunners:	Salomon Smith Barney, Credit Suisse First Boston
Coupon:	11 1/8%
Price:	98.812
Yield:		11 3/8%
Spread:	608 basis points vs. the 5 ½% Treasury due May, 2009
Call features:		Callable on April 1, 2006 at 105.563, 102.781, par on April 1, 2008 and thereafter
Equity clawback:	Until April 1, 2005 for 35% at 111.125
Ratings:	Moody's: Ba2
	Standard & Poor's: BB-
Settlement date:	March 28 (T+4)
CUSIP:	053499AB5

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