Dobson exchange for 12¼%, 13% preferreds fails

New York, March 16 - Dobson Communications Corp. said its exchanged offer for its 12¼% senior exchangeable preferred stock and 13% senior exchangeable preferred stock ended unsuccessfully without the required thresholds being met.

Tenders of a majority of each series and 75% of the combined total had been needed for the exchange to be completed.

Dobson announced the exchange on Jan. 21 and amended it on Feb. 11 following discussions with owners of the preferreds. It expired on March 15.

At the time it announced the changes, the Oklahoma City-based wireless phone company said that the holders considered neither the original terms nor the revised terms acceptable.

Under the amended terms announced Feb. 11, Dobson had been offering cash and new series J mandatory convertible preferred stock for the existing securities.

Under the revised terms, Dobson was offering for each share of preferred stock $301 in cash and one share of the new mandatory convertibles.

The new mandatory convertibles would have converted into 209 shares of class A common stock at the holder's option. There is an automatic conversion if the volume-weighted average price of the class A common stock for any consecutive 20-day period exceeds $2.25.

The new convertibles would have had a liquidation preference of the greater of $560 plus accreted value or the amount to be received on an as-converted basis. The liquidation preference will initially accrete at 1.5% and then 1% semi-annually. There is a mandatory redemption date of Nov. 1, 2013.

Dobson was also soliciting consents from holders of each series of preferreds to amend the certificate of designation to eliminate all voting rights, other than voting rights required by law, and substantially all of the restrictive covenants and to waive compliance with the provisions to be eliminated until the proposed amendments become effective or until 18 months from the expiration date of the exchange offer.

Dobson currently has $45.22 million of the 12¼% preferreds and $191.364 million of the 13% preferreds outstanding.

It announced the exchange to reduce its long-term obligations, simplify its capital structure and improve the liquidity of its class A common stock.

Houlihan Lokey Howard & Zukin Capital, Inc. was dealer manager and solicitation agent for the offer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.