NEW YORK-Metrocall Inc. last week launched a private sale of $150 million in senior subordinated notes due 2007 to repay partially the sum the paging provider has borrowed under a secured credit facility.
The sale was expected to continue this week and to close later this month, said Paul Liberty, vice president of investor relations for Metrocall, Alexandria, Va.
The new debt securities will rank pari passu, on an equal basis, for repayment priority with certain other outstanding debt, including $100 million in senior subordinated notes due 2005 that Metrocall assumed as the result of its announced merger with Pronet Inc. However, they are subordinate to the secured credit facility.
“The merged entity would benefit from greater scale and possible reductions in fixed costs, and improve Metrocall’s market share in the Eastern part of the country,” said Robert N. McCreary, senior vice president, and Cyrille R. Conseil, assistant vice president, Moody’s Investors Service Inc. speculative grade ratings group. Moody’s rated the new debt securities B3.
“We anticipate that Metrocall’s strategic emphasis of selling basic one-way paging services, of reducing its exposure to leased pagers, and our expectation of more rational pricing of services, should solidify its business position and enable it to generate free cash flow in the intermediate term.”
