RailAmerica gets required consents in tender offer for 12 7/8% notes

New York, Sept. 15 - RailAmerica Inc. (B3/B) said it has received the required amount of noteholder consents to proposed changes in the indenture governing its 12 7/8% senior subordinated notes due 2010, as part of the company's tender offer for those bonds and the accompanying consent solicitation.

The consents were received by the 5 p.m. ET Sept. 14 consent deadline, which expired as scheduled without extension. The company did not disclose the amount of notes that have been tendered so far in the tender offer, with accompanying consents.

Having received the consents, RailAmerica said that it intends to enter into a supplemental indenture putting into effect the amendments approved by a majority of its noteholders. The proposed amendments will not become operative, however, until the notes are accepted for purchase by RailAmerica and paid for under the terms of the tender offer. Once the amendments become operative, they will be binding upon the holders of the notes not tendered in the tender offer.

The underlying tender offer meantime continues and is scheduled to expire at 5 p.m. ET on Sept. 29, subject to possible extension.

As previously announced, RailAmerica, a Boca Raton, Fla.-based railroad operator, said on Aug. 31 that it had a cash tender offer for all the $130 million principal amount of the 12 7/8% notes, which had been issued in August 2000 by the company's RailAmerica Transportation Corp. subsidiary, and was also soliciting consents to amend the notes' indenture.

It set a now-expired consent deadline of 5 p.m. ET on Sept. 14 and an expiration deadline of 5 p.m. ET on Sept. 29, subject to possible extension.

The company said that it would pay total consideration of $1,152.46 per $1,000 principal amount of notes tendered and accepted for payment by the company, to those holders who tendered their notes by the consent deadline, which includes a $20 per $1,000 principal amount consent payment. Holders tendering after the deadline but before the expiration would receive tender offer considerations of $1,132.46 per $1,000 principal amount. RailAmerica will also pay accrued interest on all tendered notes.

RailAmerica said the tender offer would be conditioned upon, among other things, the receipt by the company of waivers and amendments to its senior credit facility; the tender of a majority of the notes with consents; and the receipt of sufficient proceeds from borrowings under the company's credit facility to purchase the notes.

UBS Securities LLC is dealer manager and solicitation agent (contact Liability Management Group at 203 719-4210 (collect) or 888 722-9555 x4210). The information agent is D.F. King & Co. Inc. (212 269-5500 (collect) or 800 269-6427).

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