Rural/Metro extends tender offer for 9 7/8% notes, sets purchase price

By Angela McDaniels

Tacoma, Wash., Dec. 7 - Rural/Metro Corp. extended the tender offer and consent solicitation for its 9 7/8% senior subordinated notes due 2015 to 5 p.m. ET on Dec. 8 from midnight ET on Dec. 7, according to a company news release.

The offer is being made through Rural/Metro Operating Co., LLC and Rural/Metro (Delaware) Inc. and began on Nov. 6.

In addition, Rural/Metro announced that it will pay $1,074.14 per $1,000 principal amount of notes tendered in the offer.

The purchase price was determined at 2 p.m. ET on Dec. 3 based on a fixed spread of 50 basis points over the yield to maturity on the 4% U.S. Treasury note due March 15, 2010. The tender offer yield is 107.414.

The payout includes a $20 premium for each note tendered by the consent date, which was 5 p.m. ET on Nov. 20. Holders will also receive accrued interest up to but excluding the payment date.

Rural/Metro is soliciting consent to amend the notes to eliminate or modify substantially all of the restrictive covenants and events of default contained in the indenture.

Holders who tender their notes are required to consent to the proposed amendments and vice versa.

As of 5 p.m. ET on Dec. 4, $121 million principal amount, or 96.8%, of the notes had been tendered.

This amount is unchanged from Nov. 23, when the company said it had received enough consents to make the proposed amendments.

The tender offer and the consent solicitation are contingent upon the tender of at least a majority of the outstanding principal amount of the notes and the refinancing of the company's credit facility due 2011.

Rural/Metro is a Scottsdale, Ariz.-based provider of private ambulance and fire services.

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