American Cellular prices tender consideration for 10% notes

By Angela McDaniels

Seattle, March 2 - American Cellular Corp. will pay $1,065.56 for each $1,000 principal amount of its $900 million 10% senior notes due 2011 tendered, according to a company news release.

The company began a tender offer and consent solicitation to amend the note indenture to remove substantially all of the restrictive covenants on Feb. 14. The tender offer will expire at midnight ET on March 15.

The tender consideration was determined at 2 p.m. ET on March 1 based on a fixed spread of 50 basis points over the yield on the 3 7/8% U.S. Treasury note due July 31, 2007. The reference yield and the tender offer yield are 5.044% and 5.544%, respectively.

The company will also pay accrued interest up to but excluding the settlement date.

The tender consideration includes a consent fee of $30.00 per $1,000 principal amount for noteholders who tendered by 5 p.m. ET on March 1, the consent deadline.

As of the consent deadline, holders of 97% of the outstanding principal amount of notes had tendered and submitted consents, according to the release. The company needed consents from holders of at least 75% of the notes.

The tender offer remains subject to the consummation of a new private offering of $425 million of senior notes and a new senior secured credit facility of up to $850 million.

The tender is part of a refinancing that also includes American Cellular's $18.1 million 9½% senior subordinated notes due 2009, which it expects to call, and American Cellular's existing senior secured credit facility.

The company said that if any 10% notes remain outstanding after the tender, it may leave them outstanding until maturity, redeem them after they become callable on Aug. 1, 2007 or buy them back in the open market or in privately negotiated transactions.

Morgan Stanley & Co. Inc. is dealer manager and solicitation agent (800 624-1808 or call collect 212 761-5384, attention: Tate Forrester). Bondholder Communications Group is the information and tender agent (212 809-2663, attention: Denise Conway).

American Cellular is a wholly owned subsidiary of Dobson Communications Corp., an Oklahoma City-based provider of wireless phone services to rural markets in the United States.

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