Crown Castle's tender for notes expires

New York, June 15 - Crown Castle International Corp. said it its tender offer for four series of notes expired, with response rates up slightly from the last announcement on June 8.

By the expiration deadline of midnight ET on June 14, holders had tendered $418.3 million or 97.7% of its 10¾% senior notes due 2011, $405.5 million or 99.6% of its 9 3/8% senior notes due 2011, $299.9 million or 99.9% of its 7½% senior notes due 2013 and $299.9 million or 100% of its 7½% series B senior notes due 2013.

The amounts are slightly up from the figures as of 5 p.m. ET on June 7, which were $418.3 million or 97.7% of the 10¾% notes, $405.4 million or 99.6% of the 9 3/8% notes, $298.9 million or 99.6% of the 7½% notes and $299.8 million or 99.9% of the 7½% series B notes.

On June 8, Crown Castle said it had accepted for purchase all notes tendered by 5 p.m. ET on June 7. It also announced the redemption of several other series of notes.

The notes included in the call are Crown Castle's $11.341 million principal amount of 10 3/8% senior discount notes due 2011, which will be redeemed at $1,034.58 per $1,000 principal amount at maturity; its $10.7 million principal amount at maturity of 11¼% senior discount notes due 2011, which will be redeemed at $1,056.25 per $1,000 principal amount at maturity; its $26.133 million principal amount of 9% senior notes due 2011, which will be redeemed at $1,030.00 per $1,000 principal amount; and its $4.753 million of 9½% senior notes due 2011, which will be redeemed at $1,047.50 per $1,000 principal amount.

All the redemptions will be on July 8. Crown Castle will also pay accrued interest.

On May 31 Crown Castle said it had received the necessary consents to amend the four series of notes covered by its tender offer and consent solicitation.

As of the consent deadline, Crown Castle had received tenders and consents for $418.3 million or 97.7% of the 10¾% senior notes due 2011, $405.4 million or 99.6% of the 9 3/8% senior notes due 2011, $299.9 million or 99.9% of the 7½% senior notes due 2013 and $299.8 million or 99.9% of the 7½% series B senior notes due 2013.

Crown Castle said it has entered into supplemental indentures but the changes will only become effective when it buys a majority of each series of notes.

On May 31 Crown Castle announced pricing in the offer. It said it will pay $1,024.22 per $1,000 principal amount of the 10¾% notes, $1,064.80 per $1,000 principal amount of the 9 3/8% notes, $1,098.56 per $1,000 principal amount of the 7½% senior notes, and $1,098.56 per $1,000 principal amount of the 7½% series B notes. All amounts include the consent payment.

As announced on May 17, to fund the transaction, Crown Castle sold $1.9 billion of investment-grade senior secured tower revenue notes series 2005-1 via special purpose subsidiaries that will hold nearly all the company's towers in the United States.

Servicing and repayment of the notes will come from the cash flow from operation of the towers. Excess cash flow is expected to be available to Crown Castle for general corporate purposes.

In addition to funding the tender, proceeds from the new notes will be used to repay the Houston tower operator's Crown Castle Atlantic credit facility and for general corporate purposes.

The payment for each series of notes was fixed on May 31.

The amount on offer for each $1,000 principal amount of each series of notes will be the sum of the present values as of June 8 of the redemption price on the first call date plus interest up to the first call date discounted using the yield from June 8 to the first call date of 50 basis points over the yield on the reference security, less interest from the last interest payment date less the consent payment of $40.00. Crown Castle will pay accrued interest up to but excluding the date of payment.

For the 10¾% notes, the redemption price is $1,053.75 on the first call date of Aug. 1, 2005. The reference security will be the 1½% Treasury note due July 31, 2005.

For the 9 3/8% notes, the redemption price is $1,046.88 on the first call date of Aug. 1, 2006. The reference security will be the 2% Treasury note due July 31, 2006.

For the 7½% notes and the 7½% notes series B, the redemption price is $1,037.50 on the first call date of Dec. 1, 2008. The reference security will be the 3 3/8% Treasury note due Nov. 15, 2008.

Crown Castle is also soliciting consents from holders of each series of notes to amend the indenture to eliminate substantially all of the restrictive covenants and certain events of default.

Holders cannot tender without delivering consents and vice versa.

Holders who deliver consents by the consent date will receive a consent payment of $40.00 per $1,000 principal amount.

Closing of the tender is subject to conditions, including closing of the new financing and receipt of the necessary consents to amend the indenture.

Morgan Stanley is dealer manager and solicitation agent (800 624-1808 or call collect 212 761-1864). MacKenzie Partners, Inc. is information agent (800 322-2885 of call collect 212 929-5500).

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