Telecom Corp. of New Zealand begins exchange offer, consent bids

By Angela McDaniels

Tacoma, Wash., Aug. 31 - Telecom Corp. of New Zealand Ltd.'s TCNZ Finance Ltd. began an exchange offer and consent solicitation for its £125 million of 5.625% notes due 2018 and £150 million 5.75% notes due 2020 and a consent solicitation for its CHF 200 million 4.375% notes due 2012, according to a 6-K filing with the Securities and Exchange Commission.

Sterling notes

The company is asking the holders of the British pound-denominated notes to pass an extraordinary resolution sanctioning the waiver of any event of default that may occur as a result of its planned demerger into Telecom, a telecommunications and IT services company, and Chorus Ltd., a fixed-line access network infrastructure company.

Holders who exchange notes will receive an equal amount of British pound-denominated 6.75% notes due 2020 issued by Chorus under its euro medium-term note program plus accrued interest.

Holders who exchange prior to the early submission deadline will receive in cash an early exchange fee of £20 per £1,000 principal amount of 5.625% notes and £10 per £1,000 principal amount of 5.75% notes.

In addition, holders who submit an early voting instruction in favor of the extraordinary resolution by the early submission deadline will receive an early voting fee of £5 per £1,000 principal amount of notes.

Holders who exchange will be deemed to have submitted a voting instruction in favor of the extraordinary resolution.

The early submission deadline is 11 a.m. ET on Sept. 9. The final deadline is 6 a.m. ET on Sept. 20. The noteholder meetings will be held on Sept. 22. The settlement date is expected to be Nov. 30.

Holders must exchange a minimum of £100,000 of notes in order to participate in the exchange offer.

Swiss franc notes

In addition, TCNZ Finance is soliciting consents from the holders of its 4.375% notes to pass an extraordinary resolution providing for the insertion of a new condition obliging the issuer to redeem all, but not some only, of the notes within 30 days of the granting of final orders in respect of the demerger.

The extraordinary resolution will also waive any event of default that may occur as a result of the demerger.

The early submission deadline is 11 a.m. ET on Sept. 14, and the deadline for submitting voting instructions is 6:45 a.m. ET on Sept. 20. The meeting will be held on Sept. 22.

Holders who submit instructions in favor of the resolution by the early submission deadline will receive an early consent fee equal to CHF 25 per CHF 5,000 principal amount of notes.

For the pound-denominated notes, the dealer manager is Citigroup Global Markets Ltd. (+44 0 207 986 8969 or liabilitymanagement.europe@citi.com), and the tabulation agent is Citibank, NA (+44 (0) 207 508 3867 or exchange.gats@citi.com).

For the franc-denominated notes, the dealer managers are Citigroup and Credit Suisse Securities (Europe) Ltd. (+44 20 7883 9198 or liability.management@credit-suisse.com). The Swiss proxy agent is Credit Suisse AG (+41 44 333 49 73 or +41 44 333 28 86), and the tabulation agent is Citibank.

The telecommunications company is based Auckland, New Zealand.

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