OKLAHOMA CITY, Nov. 8, 2004 (PRIMEZONE) -- Dobson Cellular Systems, Inc., a wholly owned subsidiary of Dobson Communications Corporation (Nasdaq:DCEL), today announced that it has consummated a private offering of $825 million of Senior Secured Notes, consisting of $250 million of 8-3/8% First Priority Senior Secured Notes due 2011, $250 million of First Priority Senior Secured Floating Rate Notes due 2011 and $325 million of 9-7/8% Second Priority Senior Secured Notes due 2012. The First Priority Senior Secured Floating Rate Notes due 2011 will bear interest at a rate equal to three-month LIBOR plus 4.75%.
The proceeds from the debt offering were used to refinance outstanding borrowings under the existing senior credit facility of Dobson Cellular and to repurchase a portion of Dobson Communications' outstanding debt securities in privately negotiated transactions, with the remainder to be used for general corporate purposes, including the funding of the subsidiary's planned acquisition of RFB Cellular, Inc. As part of the refinancing, Dobson Cellular has amended its existing credit facility to, among other things, eliminate the term loan portion, amend the revolving portion to provide for maximum borrowing of $75 million, and amend certain financial covenants.
Dobson also announced today that it has repurchased $174.8 million (face value) of its 8-7/8% Notes due 2013 and $1 million (face value) of its 10-7/8% Notes due 2010 in privately negotiated repurchases, for an aggregate price of $123.7 million.
The Senior Secured Notes due 2011 and 2012 were sold only to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. The notes have not been registered under the Securities Act of 1933 or under any state securities laws, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer, offer to sell, or solicitation of an offer to buy any securities.