Mexico's Axtel to issue $81.3 million notes in swap for early tenders

By Susanna Moon

Chicago, Dec. 12 - Axtel, SAB de CV said it will issue $81,269,000 of new notes in exchange for $82,542,000 of 7 5/8% senior notes due 2017 tendered by the early tender deadline.

The company plans to settle the early tendered notes on Dec. 13, according to a company press release.

As previously announced, the company is offering to issue up to $110 million of senior secured notes due 2020 in the exchange offer for two series of notes. The initial interest rate will be 7%. The interest rate will increase to 8% on Jan. 31 and to 9% on Jan. 31, 2015.

Holders had tendered $156.36 million principal amount of the company's outstanding 7 5/8% notes and 9% senior notes due 2019 by the Dec. 6 early tender date.

Holders had tendered $82,542,000 principal amount, or 62.1%, of the $132.99 million outstanding principal amount of 7 5/8% notes and $73,818,000 principal amount, or 54.9%, of the $134,574,000 outstanding principal amount of 9% notes.

The exchange offer will continue until 11:59 p.m. ET on Dec. 20. The offer began Nov. 22.

Holders who agree to exchange their bonds after the early deadline will receive $910 of 2020 bonds for each $1,000 of 7 5/8% bonds exchanged and $800 of 2020 bonds for each $1,000 of 9% bonds held, according to a previous news release.

In addition, the company plans to issue up to $36 million of additional senior secured notes due 2020 in a private placement.

"Upon consummation of the transaction as presently contemplated, the outstanding principal amount of 2020 secured notes will increase from $249 million to over $350 million, which makes the notes eligible to participate in several market indexes and thus, should in turn significantly increase their liquidity," Felipe Canales, Axtel's chief financial officer, said in a news release.

The information agent is D.F. King & Co., Inc. (212 269-5550, 800 967-4612, axtel@dfking.com or dfking.com/axtel).

Axtel is a fixed-line integrated telecommunications company based in San Pedro Garza Garcia, Mexico.

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