Nextel launches exchange offer for 7 3/8% notes, 6 7/8% notes, 5.95% notes

By Jennifer Chiou

New York, July 12 - Nextel Communications, Inc. has begun an exchange offer any and all of the following notes: $2.137 billion of 7 3/8% senior series A serial redeemable notes due 2015, $1.4729 billion of 6 7/8% senior series B serial redeemable notes due 2013 and $1.1699 billion of 5.95% senior series C serial redeemable notes due 2014.

For the series A notes, Nextel will exchange an equal principal amount of new 7 3/8% senior series D serial redeemable notes due 2015, for the series B notes an equal principal amount of new 6 7/8% series E notes dues 2013 and for the series C notes an equal principal amount of new 5.95% series F notes due 2014.

Nextel is also soliciting consents to amend the terms of the series A, B and C notes and to the related indenture.

The exchange offer, which is contingent upon Nextel receiving a majority of consents, will expire at midnight ET on Aug. 5, unless extended.

The newly issued notes for all three series will differ from the earlier series of notes in that they will have a new covenant Nextel will seek from Sprint Corp. - to be renamed Sprint Nextel following the proposed merger - to guarantee all payment obligations as well as a new financial information and reporting covenant.

If a parent guarantor later guarantees the exchange notes, the guarantor may instead provide required financial statements and reports.

The amendments proposed under the consent solicitation include eliminating the covenant to provide financial information for the original notes, providing that certain restrictive covenants end upon the merger or an investment-grade rating, whichever is first, and changing a provision so that Nextel can amend the indenture without the consent of holders.

The amended covenants will only apply to those original notes that remain outstanding after the exchange.

Georgeson Shareholder Communications, Inc. is the information agent (877 278-4751).

Reston, Va.-based Nextel provides wireless communications services.

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