Pac-West Telecomm noteholders exchange $24.519 million of 13½% notes

By Angela McDaniels

Seattle, Jan. 31 - Pac-West Telecomm, Inc. said that noteholders tendered $24.519 million principal amount, or 67.89%, of the company's 13½% senior notes due 2009 during an exchange offer that ended on Monday.

For each $1,000 of notes tendered for exchange, noteholders received $1,000 principal amount of new 13½% senior priority notes due 2009 plus accrued interest up to but excluding the exchange date.

The terms and conditions of the new notes are substantially identical to the old 13½% notes, except that interest under the new 13½% notes will not be payable until maturity.

Noteholders who tendered were required to give consent to the proposed amendment on the interest payment in the indenture.

The company began the exchange offer and consent solicitation for the notes on Dec. 21.

Following the completion of the exchange, there are $11.583 million principal amount of old 13½% senior notes outstanding and roughly $26.186 million principal amount of 13½% senior priority notes outstanding, according to a company news release.

Pac-West launched the offer after receiving a commitment from SMH Capital Advisors, Inc. - which had discretion over $21 million of the $36.102 million outstanding principal amount of the notes - to tender the notes should the company hold an exchange offer.

SMH Capital Advisors made the commitment after it received a liquidation analysis estimating that, were the company to liquidate on Nov. 30, noteholders would receive a distribution of between 1% and 10% of the principal amount of notes outstanding, according to an 8-K filing with the Securities and Exchange Commission.

Pac-West said the exchange offer is part of its restructuring, under which an affiliate of private investment company Columbia Ventures Corp. purchased Pac-West's senior secured credit facility, Pac-West issued $1 million of preferred stock to another affiliate of Columbia Ventures and Pac-West agreed to restructure the $5.7 million owed to Merrill Lynch Capital.

Under the Merrill Lynch restructuring agreement, Pac-West will pay Merrill Lynch 20% of any interest savings achieved by the tender of more than $21 million of the 13½% notes.

Wells Fargo Bank, NA was the exchange agent.

Pac-West is a communications company based in Stockton, Calif.

© 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.