RCN starts tender for up to $290 million senior notes

New York, July 10 - RCN Corp. announced it will start a cash tender offer Friday for up to $290 million of its senior notes, paying up to $92.5 million.

The Princeton, N.J. communications company will organize the tender as a modified dutch auction, accepting offers to sell from holders of the notes at between $320 and $370 per $1,000 face amount plus accrued interest.

RCN said the offer is being carried out in anticipation of the closing of its sale of a cable system in and around Carmel, N.Y. for $120 million in cash to Susquehanna Communications. The system has 29,800 subscribers and RCN said it is one of the few it operates outside major metropolitan markets.

Funding for the tender offer will come from RCN's $41.5 million second lien senior facility from Evergreen Investments, which it obtained last month.

RCN noted that the $290 million principal amount is based on the low end of the price range in the tender and as a result it may buy fewer notes.

Under the modified dutch auction, RCN will accept tender notes from the lowest to highest prices until it has spent $92.5 million plus accrued interest. All notes will be bought at the single highest price.

There is no minimum for the tender.

The tender expires at 11.59 p.m. ET on August 7.

D.F. King & Co., Inc. (800 488-8075) is the information agent for the offer and HSBC Bank USA is the depositary.

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