Dobson Communications Corp.'s $700 million refinancing is scheduled to launch for syndication tomorrow, according to bankers familiar with the deal. The credit, led by Lehman Brothers and Bear Stearns, includes a $150 million revolver and a $550 million "B" loan. Price talk is in the LIBOR plus 31/2% range for the institutional piece, and in the LIBOR plus 3% context for the revolver, the banker noted.
Proceeds from the credit, along with an offering of $600 million in senior notes due 2013, will go toward refinancing and replacing borrowings under Dobson's credit facilities. As of June, the Dobson Operating Co. had $484 million outstanding on its credit, while subsidiary Dobson/Sygnet Communications facility had $267 million outstanding. The operating company's credit has pricing in the LIBOR plus 11/2-23/4% range, while the Dobson/Sygnet facility is priced in the LIBOR plus 21/2-33/4% context.
Proceeds from the bank and bond deals will also go toward repurchasing Dobson/Sygnet's 121/4% senior notes. Dobson commenced a tender offer last Monday to acquire $189 million outstanding of the senior notes. Proceeds will also go toward the repurchase of a portion of Dobson's outstanding 121/4% senior preferred stock. Lehman, Bear Stearns and Morgan Stanley are running the notes offering. Dobson provides wireless phone service to rural markets in the U.S. Warren Henry, v.p. of investor relations of Oklahoma City-based Dobson, and a Bear Stearns official declined to comment. A Lehman banker did not return calls.