FairPoint postpones financing deal, cancels tender offer for 2008 and 2010 notes

New York, Nov. 8 - FairPoint Communications Inc. said that it had decided to postpone its offering of Income Deposit Securities and related refinancing transactions, and accordingly, was terminating its previously announced tender offers and consent solicitations for its 9½% senior subordinated notes due 2008, its floating-rate callable securities due 2008, its 12½% senior subordinated notes due 2010, and its 11 7/8% senior notes due 2010.

Completion of the income securities offering and the other financial transactions were a condition to completion of the tender offers.

The company said that it has accepted no notes for payment. FairPoint will instruct the depositary for the tender offers to promptly return any and all notes that were tendered by their holders to those tendering noteholders. All consents to proposed indenture changes that were delivered will have no effect.

As previously announced, FairPoint Communications, a Charlotte, N.C.-based telecommunications services provider, said on July 16 that it had begun concurrent cash tender offers for all its outstanding 9½%, 12½%, 11 7/8% and floating-rate notes, and would also solicit noteholder consents for certain proposed amendments to the notes' respective indentures.

The company said the purchase price for the 9½% notes validly tendered by the expiration deadline and accepted for purchase would be $1,015.42 per $1,000 principal amounts, plus accrued and unpaid interest up to but not including the payment date. It said the price for the floating-rate notes would be $982.50 per $1,000 principal amount, plus accrued interest up to the payment date.

It said that the purchase price for the 12½% notes would be determined by means of a formula, partly based on a fixed spread of 50 basis points over the yield on the pricing date of the reference security, the 1 5/8% U.S. Treasury note due April 30, 2005, plus accrued interest up to the payment date.

And it said the purchase price for the 11 7/8% notes would be determined by means of a formula blending the notes' equity-clawback price with a price partly based on a 50 basis point fixed spread over the yield on the pricing date of the reference security, the 2¼% U.S. Treasury note due Feb. 15, 2007, plus accrued interest up to the payment date.

Total consideration for each series of notes would also include a $20 per $1,000 principal amount early consent premium for those holders who tendered their notes and provided the related consents by the early consent deadline of Aug. 20; holders tendering after that deadline would not receive the early consent premium.

FairPoint said on Oct. 15 that it was extending the tender offer for each series of notes to 5 p.m. ET on Nov. 30, subject to possible further extension, and said that as of 5 p.m. ET on Oct. 14, it had received tenders and consents representing about 95.92% of the 9½% notes, 89.87% of the floating-rate notes, 98.83% of the 12½% notes and 98.98% of the 11 7/8% notes.

The company said that the tender offers would be subject to several conditions, including, among other things, FairPoint's completion of its proposed IDS offering and senior subordinated note offering and obtaining a new senior secured credit facility; and a minimum tender condition.

Citigroup was the dealer manager and solicitation agent for the tender offers and consent solicitations (call 800 558-3745 or 212 723-6106). Global Bondholder Services Corp. was the information agent (call 212 430-3774).

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