MQ Associates, MedQuest complete consent solicitation for 12¼% notes, 11 7/8% notes

New York, Sept. 7 - MQ Associates, Inc. and MedQuest, Inc. said they have completed their consent solicitations for MQ's outstanding 12¼% senior discount notes due 2012 and MedQuest's 11 7/8% senior subordinated notes due 2012.

After multiple extensions, the solicitation ended at 1 p.m. ET on Sept. 7.

The company received and accepted consents from holders of $135.8 million of the 12¼% notes and $179.2 million of the 11 7/8% notes, the response being unchanged from Aug. 31.

MedQuest also received $20 million in cash for selling to an affiliate of J.P. Morgan Partners, LLC 20 million shares of preferred stock and a warrant to purchase 3 million shares of common stock of MQ Associates.

As already reported, MedQuest was late filing its annual report for fiscal 2004 as well as its first-quarter report with the Securities and Exchange Commission. The deadline was May 15.

Under the solicitation, the companies were looking to amend the note indentures to extend the filing deadline to Dec. 31. Those who submit consents will also waive all defaults in connection with the financial reporting issues.

As previously announced, for investors who consented before the deadline, MQ Associates will pay $1.75 for each $1,000 principal amount at maturity of the 12¼% notes while MedQuest will pay $2.50 for each $1,000 principal amount at maturity of the 11 7/8% notes.

The companies will also make an additional 100 basis point interest payment in cash from July 1 to the earlier of the date the company files its reports with the SEC or, if the restatement date has not occurred by the waiver expiration date, the date that the company receives a notice of default under the indentures.

The additional interest payment will be paid quarterly on Oct. 15 for holders of record Oct. 1, Jan. 15, 2006 for holders of record on Jan. 1, 2006 and on the 15th day of the month following the end of each subsequent calendar quarter, the companies previously said.

Conditions of the amendments include MQ's receipt of at least $20 million for the sale of capital stock shares and the payment of the consent fee as well as approval from a majority of each set of notes.

On June 30, MedQuest received an extension of its limited waiver to Aug. 1 for reporting defaults.

MQ Associates is a holding company that owns 100% of MedQuest's outstanding stock.

The Salt Lake City outpatient diagnostic imaging center operator launched the solicitations on July 29.

Global Bondholder Services Corp. is the tabulation agent and information agent (866 952-2200 or collect 212 430-3774).

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