Rural Cellular Corp. ticked up to the 98100 range after the company announced that it would use the proceeds from a $325 million note issue and cash on hand to reduce its credit facility by $356.1 million. Two weeks ago the company's term loan "B" was quoted in the 951/2 961/2 context, according to LoanX. No trades could be confirmed. Market players had predicted that Rural Cellular would issue new notes ever since Centennial Communications Corp. tapped the high-yield market last month (LMW, 6/16). Rural Cellular's notes were completed last week and carry a coupon of 97/8%.
As of March 31, Rural Cellular had about $746 million in outstanding bank debt, according to the company's May 14 10-Q. The company had $16.142 million outstanding on its revolver, $305.625 million on its "A" term loan, $184.757 million on each of its "B" and "C" tranches and $54.627 million on its "D" piece. Which tranches would be affected by the paydown could not be determined. The bank debt is led by TD Securities. Calls to Wesley Schultz, executive v.p. and cfo of Rural Cellular, were referred to his assistant, who did not return calls by press time.