Consent Solicitation - Airtouch Debt Securities
Vodafone AirTouch PLC
26 January 2000
VODAFONE AIRTOUCH GUARANTEES AND COMMENCES
CONSENT SOLICITATION FOR AIRTOUCH'S DEBT SECURITIES
Vodafone AirTouch Plc (Vodafone AirTouch) announces today
that on 25 January 2000 it unconditionally guaranteed the
outstanding debt securities issued by its wholly owned
subsidiary AirTouch Communications, Inc. (AirTouch) which
are:
* 7.125% Notes Due 2001 (US$250 million),
* 7% Notes Due 2003 (US$250 million),
* 6.35% Notes Due 2005 (US$200 million),
* 7.50% Notes Due 2006 (US$400million),
* 6.65% Notes Due 2008 (US$500 million), and
* 5.50% Notes Due 2008 (DM 400 million)
Vodafone AirTouch also announces today the start of a
consent solicitation with respect to AirTouch's US Dollar
denominated debt securities (the 'US Debt Securities').
In addition to guaranteeing the AirTouch debt securities,
Vodafone AirTouch has added covenants and events of
default to the indentures under which they were issued,
that are substantially identical to those that will be
contained in the indenture for its new global Rule 144A
US$ bond offering, which was announced on 21 January
2000. The new US$ bonds are expected to include
provisions under which the interest rates on the bonds
will increase after their original issuance if Vodafone
AirTouch's exchange offer for the shares and ADSs of
Mannesmann A.G. is declared unconditional or terminates
without success and thereafter either Moody's or Standard
& Poor's confirms the ratings assigned to Vodafone
AirTouch's unsecured senior debt securities at a level
below A3 or A-, respectively.
The actual amounts of the interest rate increases will
vary depending upon the different stated maturities of
the several series of the new US$ bonds and the extent of
the ratings downgrade. Because it believes that the
holders of AirTouch's debt securities should receive
similar provisions, Vodafone AirTouch also agreed that
if, but only if,
i) the new US$ bonds include provisions that will
increase the interest rates on such bonds after
their original issuance in certain circumstances;
and
ii) the interest rates on such bonds actually increase
as a result of those provisions,
then Vodafone AirTouch will, or will cause AirTouch to,
pay additional interest on AirTouch's debt securities
that is commensurate to the increase in the interest
rates of the new US$ bonds. Because the stated
maturities of the different series of AirTouch's debt
securities are expected to be different from those of the
series of new US$ bonds, Vodafone AirTouch will have the
sole and absolute discretion to determine, in any
equitable manner, the amount of additional interest
payable with respect to each series of AirTouch's debt
securities that is commensurate to the interest rate
increases (if any) on the new US$ bonds. The amount is
likely to be different for each series of AirTouch's debt
securities.
In terms of the consent solicitation, Vodafone AirTouch
wishes to have substantially similar covenants in all
public debt issued by it, or guaranteed by it, and
therefore is seeking consents to a proposed amendment to
the indenture under which the US Debt Securities were
issued. This would delete in their entirety the covenants
that restrict the ability of AirTouch and certain of its
subsidiaries to incur debt or liens and restrict
AirTouch's ability to merge, consolidate or sell or
otherwise dispose of all or substantially all of its
assets. Since Vodafone AirTouch has guaranteed AirTouch's
debt securities, added to the indentures under which they
were issued the same covenants and events of default that
will apply to Vodafone AirTouch's new US$ bonds and
provided for additional interest on AirTouch's debt
securities commensurate to any increase in the interest
rates applicable to the new US$ bonds after they are
issued, Vodafone AirTouch believes it is appropriate to
amend the indenture for the US Debt Securities to delete
the covenants relating to AirTouch. The indenture for the
DM denominated debt securities currently does not contain
any similar covenants. The implementation of the proposed
amendment is conditioned upon, among other things, the
receipt of consents from the holders of a majority in
aggregate principal amount of the outstanding US Debt
Securities voting as a single class.
The consent solicitation will expire at 5:00 p.m., New
York City time, on 15 February 2000, unless extended. If
the requisite consents have been received and have not
been revoked at the expiration of the solicitation period
and certain other conditions are satisfied or waived, the
company will promptly pay to the holders of securities
who have delivered (and have not revoked) a valid consent
in respect of such securities, for each $1,000 principal
amount of securities in respect of which such consents
have been delivered, an amount equal to a consent fee of:
* US$2.50 in the case of the 7.125% Notes Due 2001,
* US$5.00 in the case of the 7% Notes Due 2003,
* US$6.00 in the case of the 6.35% Notes Due 2005,
* US$6.50 in the case of the 7.50% Notes Due 2006,
and
* US$7.50 in the case of the 6.65% Notes Due 2008
If the consent solicitation is successful, a fee of
US$7.50 for each principal amount of the DM denominated
debt securities equivalent to US$1,000 will also be paid
to the holders of those securities.
The new US$ bonds are not being, and have not been,
registered under the U.S. Securities Act of 1933 and may
not be offered or sold in the United States absent
registration under that Act or an applicable exemption
from such registration.
Goldman, Sachs & Co. will act as Solicitation Agents for
the consent solicitation. The Information Agent is
ChaseMellon Consulting Services, L.L.C.
Persons with questions regarding the consent solicitation
should contact the Information Agent at (800) 851-9671 or
the Solicitation Agents at (800) 828-3182.
For further information:
Vodafone AirTouch
Terry Barwick, Corporate Affairs Director
Tim Brown, Investor Relations Director
Melissa Stimpson, Senior Investor Relations Manager
Tel: +44 (0) 1635 33 251
Tavistock Communications
Lulu Bridges
Tel: +44 (0) 171 600 2288