Western Union Close to Eliminating Debt

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Western Union Close to Eliminating Debt NEWARK, N.J. - Western Union Corp., the communications pioneer that has foundered because of heavy debts, said Friday it was close to alleviating a substantial part of its obligations. The company said enough bondholders appeared to have accepted its offer to exchange high-yield ``junk bond'' debt securities for 50 cents on the dollar. The announcement suggested the company has avoided a cash crisis. There had been persistent speculation that Western Union could have been forced into bankruptcy-court refuge because of its debts.

When the exchange offer expired midnight Thursday, preliminary figures indicated that $328.6 million of the debt securites, which paid 19 1/4 percent interest, and $5.9 million of securities, which paid 16 percent interest, had been exchanged for the cash, company spokesman Warren Bechtel said. Western Union had offered to make the exchange for up to $350 million worth of these securities. A minimum of $250 million of the 19 1/4 percent notes had to be tendered for the proposal to go through, Bechtel said.

The apparent success of the offer would mark the end of a grueling five-month ordeal for Western Union, which has been struggling to satisfy bondholders afraid they wouldn't get repaid. The company, based in Saddle River, N.J. originally had proposed exchanging $530 million of high-yield notes for lower-yield notes plus stock. After numerous deadline extensions for acceptance of that offer, Western Union realized it wouldn't be accepted and offered the cas instead.

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