Stratus Technologies tenders for 10 3/8% notes

New York, March 8 - Stratus Technologies, Inc. said it has begun a cash tender offer for its $144.885 million of 10 3/8% senior notes due 2007.

The Maynard, Mass., supplier of high availability servers is also soliciting consents to amend the note indenture to eliminate substantially all the restrictive covenants and certain events of default and to amend other provisions.

For each $1,000 principal amount of notes, Stratus is offering a price based on a fixed spread of 50 basis points over the yield of the 2 7/8% U.S. Treasury note due Nov. 30, 2006. The total includes a $30.00 per $1,000 consent payment that will only be paid to holders who tender with consents by the consent deadline.

Pricing will be set at 2 p.m. ET on the second business day before the consent deadline, expected to be on March 17.

Accrued interest up to but excluding the payment date will also be paid.

Holders who tender must deliver consents and vice versa.

The consent deadline is 5 p.m. ET on March 21 and the offer expires at 5 p.m. ET on April 5.

The offer is subject to conditions including the receipt of consents for a majority of the notes and Stratus raising sufficient funds from new debt to pay for the tender.

Goldman, Sachs & Co. is dealer manager (contact Credit Liability Management Group at 800 828-3182 or call collect 212 357-7867). D.F. King & Co., Inc. is the information agent and tender agent (800 290-6426 or call collect 212 269-5550).

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