Windstream takes in total tenders for 90.5% of Paetec's 8 7/8% notes

By Jennifer Chiou

New York, Feb. 6 - Windstream Corp. received overall tenders for $588.5 million principal amount, or 90.5%, of Paetec Holding Corp.'s $650 million of 8 7/8% senior secured notes due 2017.

This figure is up from the $583.3 million principal amount received by 5 p.m. ET on Jan. 22, the early tender deadline.

The offer ended at midnight ET on Feb. 5.

Windstream began the offer on Jan. 8 along with a simultaneous consent solicitation.

As previously reported, the company was soliciting consents to amend the notes to eliminate or modify some restrictive covenants and to release all of the collateral securing obligations under the notes.

The adoption of the amendments required consents from holders of a majority and, in some cases, at least two-thirds of the outstanding notes. The company previously said it received the needed consents and entered into a supplemental indenture, and the amendments, including the release of the collateral, already became effective.

The notes tendered by the early tender deadline were accepted for payment and purchased on Jan. 23. Settlement occurred concurrently with the closing of Windstream's offering of $700 million of 6 3/8% senior notes due 2023.

Windstream paid $1,080.17 for each $1,000 principal amount of notes plus accrued interest. This payment included a $30.00 consent payment.

For notes tendered after the early tender deadline, the payment will be $1,050.17 per $1,000 principal amount plus accrued interest up to but excluding the settlement date.

Windstream said it will redeem the remaining $61.5 million of notes on Feb. 25. The redemption price is par plus an applicable premium.

Pricing for the offer was set at 2 p.m. ET on Jan. 22 using the bid-side yield on the 0.375% U.S. Treasury note due June 30, 2013 plus a fixed spread of 50 basis points.

The total purchase price is equal to the present value on the early settlement date of $1,044.38 if the amount were to be paid on June 30, 2013 and all scheduled interest payments on the principal amount from the early payment date up to and including the earliest redemption date, discounted to present value based on the fixed spread minus accrued interest up to but excluding the early payment date.

Wells Fargo Securities, LLC (866 309-6316 or collect 704 410-4760) was the dealer manager and solicitation agent. The tender agent and information agent was D.F. King & Co., Inc. (800 290-6426 or, for banks and brokers, 212 269-5550).

Windstream is a Little Rock, Ark.-based provider of network communications, including cloud computing and managed services, to businesses. Paetec is a competitive local exchange carrier based in Fairport, N.Y. It was acquired by Windstream in 2011.

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