RCN Defers Decision on Interest Payments4/15/2004 10:34 AM Eastern
RCN Corp. said Thursday that it has put off a decision on whether to make interest payments due by end-of-day.
The struggling cable overbuilder said it has deferred the decision to make interest payments of approximately $8 million on its 10% senior notes due 2007 and approximately $17.6 million on its 11.125% senior discount notes due 2007.
The company said April 1 that talks with its senior secured lenders and others on a consensual financial restructuring have been extended until 11:59 p.m. May 3.
RCN had said in a statement Feb. 14 that it would not make interest payments on its 10.125% senior notes, which could have triggered defaults on all of its debt -- about $1.1 billion in bond obligations and $520 million in bank facilities.
But the company reached a forbearance agreement with lenders and bondholders, who agreed not to declare an event of default until at least March 1. That date was pushed to March 15, then April 1, then May 3.
The interest payment on the 10.125% notes was due Jan. 15 and, at that time, RCN said it was negotiating with bondholders concerning payment -- a move that many observers saw as a tactic to get bondholders to accept a debt-for-equity swap.
The operator has said that it expects any financial restructuring to be implemented through a reorganization under Chapter 11.
It has set up a Web site (rcntomorrow.com) to provide updates on its restructuring process.