Primus falls short of minimum needed for 13% notes, terminates offers

By Jennifer Chiou

New York, March 24 - Primus Telecommunications Group, Inc. announced the termination of the private exchange offers for units representing $130 million of 13% senior secured notes due 2016 issued by Primus Telecommunications Holding, Inc. and Primus Telecommunications Canada Inc. and $114 million of 14¼% senior subordinated notes due 2013 issued by Primus Telecommunications IHC, Inc.

The issuers were also soliciting consents to amend the indentures governing the old notes to eliminate some restrictive covenants and events of default and to release collateral securing the 13% notes.

In order to adopt the amendments, consents were needed from the holders of at least a majority of the outstanding notes. To adopt the lien release, consents were needed from the holders of at least two-thirds of the outstanding 13% notes.

Though the company reached the minimum threshold for the 14¼% notes, this condition was not met for the 13% notes, thus prompting Primus to cancel the offers.

Primus Telecommunications Holding planned to issue up to $240 million of new 9½% senior secured notes due April 15, 2019 in the offers.

The company specifically was offering $1,140 principal amount of new notes for each $1,000 principal amount of 13% notes and $1,020 principal amount of new notes for each $1,000 principal amount of 14¼% notes.

Holders were also to have received accrued interest up to but excluding the settlement date.

The company was first going to accept for exchange any and all 13% notes tendered. It was then to move onto the maximum principal amount of 14¼% notes that it could accept, on a pro rata basis, without going over the $240 million cap for the new notes.

No separate consent payment was to have been made.

The exchange offers were conditioned on the success of the consent solicitation and began on Feb. 10.

The exchange offers and consent solicitations were supposed to expire at 5 p.m. ET on March 23.

The new notes were being offered only to qualified institutional buyers, as defined in Rule 144A under the Securities Act, in the United States; to persons outside the United States who are not U.S. persons, as defined in Regulation S; and to institutional accredited investors.

As announced on March 17, Primus Telecommunications said it will redeem $24,014,974 of its 14¼% notes at par plus accrued interest.

The exchange agent was D.F. King & Co., Inc. (800 848-3416 or, for banks and brokers, 212 269-5550).

Primus is a Mclean, Va.-based provider of integrated communications services.

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