OKLAHOMA CITY, May 8, 2006 (PRIMEZONE) -- Dobson Communications Corporation (the "Company") (Nasdaq:DCEL) announced today that its wholly-owned subsidiary Dobson Cellular Systems, Inc. ("Dobson Cellular") has commenced a cash tender offer for any and all of its $250 million aggregate principal amount of First Priority Senior Secured Floating Rate Notes due 2011 (CUSIP No. 256067AF6) (the "Notes") and a consent solicitation to amend the related Notes and indenture. The terms and conditions are set forth in the Offer to Purchase and Consent Solicitation Statement dated May 8, 2006 (the "Statement").
The principal purpose of the tender offer is for Dobson Cellular to acquire all of the outstanding Notes. The purpose of the consent solicitation is to amend the Notes and the indenture to provide that the tendered Notes will have substantially identical terms to Dobson Cellular's existing 8-3/8% First Priority Senior Secured Notes due 2011 and to provide for resale of such tendered Notes (the "Series B Notes") in a separate offering to qualified institutional buyers under Rule 144A and outside the United States in compliance with Regulation S. If the Notes validly tendered and accepted for payment pursuant to the tender offer are less than all of the currently outstanding Notes, Dobson Cellular intends to issue additional Series B Notes pursuant to the indenture in such Rule 144A/Regulation S offering and use the proceeds of such additional Series B Notes (the "Additional Series B Notes") to redeem the non-tendered Notes pursuant to an expected amendment to the optional redemption notice provisions in the Notes and the indenture on or about November 1, 2006, which is the first date on which the Notes may be redeemed under the indenture (the "Earliest Redemption Date"), or defease or otherwise discharge such non-tendered Notes.
The solicitation of consents will expire at 5:00 p.m., New York City time, on May 19, 2006, unless extended (the "Consent Date"). The tender offer will expire at 12:00 midnight, New York City time, on June 5, 2006, unless extended (the "Expiration Date").
The total consideration for Notes validly tendered and accepted for payment pursuant to the tender offer and consents validly delivered pursuant to the solicitation on or prior to the Consent Date will be equal to the present value on May 22, 2006, of all future cash flows on the Notes to the Earliest Redemption Date, calculated in accordance with standard market practice, based on the assumptions that the Notes would be redeemed in full at $1,020.00 per $1,000 principal amount of Notes on the Earliest Redemption Date and that the yield to the Earliest Redemption Date is equal to the sum of (i) the yield on the 2.50% U.S. Treasury Note due October 31, 2006 (the "Reference Security"), as calculated by Morgan Stanley & Co. Incorporated in accordance with standard market practice, based on the bid-side price for the Reference Security, as of 2:00 p.m., New York City time, on May 19, 2006, the tenth business day immediately preceding the scheduled Expiration Date, as displayed on the Bloomberg Government Bondtrader, Page BBT3 (or any recognized quotation source selected by Morgan Stanley & Co. Incorporated in its discretion if the Bloomberg Government Bondtrader is not available or is manifestly erroneous), plus (ii) 50 basis points, minus accrued and unpaid interest from and including the last interest payment date, to, but not including, May 22, 2006 (the "Total Consideration"). The coupon rate on the Notes as of the most recent coupon reset date immediately prior to the launch of the tender offer will be used in calculating the Total Consideration. The coupon rate on the Notes as of May 1, 2006 is 9.89875%. Holders whose Notes are validly tendered and accepted for payment pursuant to the tender offer and whose consents are validly delivered on or prior to the Expiration Date but after the Consent Date will be eligible to receive the Total Consideration less a consent payment of $30.00 per $1,000 principal amount of Notes tendered.
The tender offer is subject to the satisfaction of certain conditions, including the condition that at least 75% of the outstanding Notes are tendered and the condition that Dobson Cellular shall have priced an offering consisting of the resale of the tendered Notes as Series B Notes and the sale of any Additional Series B Notes (the "Series B Offering"). Any or all of the conditions, other than the condition that holders of at least a majority of the outstanding Notes consent to the proposed indenture amendments, may be waived by Dobson Cellular in its sole discretion. Dobson Cellular expects to pay for tendered Notes with the proceeds from the Series B Offering. Further details concerning the tender offer and consent solicitation are set forth in the Statement.
The Company has engaged Morgan Stanley & Co. Incorporated as Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Persons with questions regarding the tender offer or the consent solicitation should be directed to Morgan Stanley toll-free at (800) 624-1808 or collect at (212) 761-1941 (attention: Francesco Cipollone). Requests for documents should be directed to Bondholder Communications Group, the Information and Tender Agent for the tender offer and consent solicitation, at (212) 809-2663 (attention: Denise Conway).
This press release is for informational purposes only and is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of a consent with respect to any of the Notes. The tender offer and consent solicitation are being made solely by the Statement. Any securities to be offered in the proposed Series B Offering will not be registered under the Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Dobson Communications is a leading provider of wireless phone services to rural markets in the United States. Headquartered in Oklahoma City, the Company owns wireless operations in 16 states, with markets covering a population of 11.9 million. The Company serves approximately 1.5 million customers. For additional information on the Company and its operations, please visit its Web site at http://www.dobson.net.
This press release contains "forward-looking statements" that are subject to risks and uncertainties. These include, but are not limited to, statements regarding the Company's plans, intentions and expectations. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. A more extensive discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports and other filings filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements.