LodgeNet Interactive Corporation (NASQAQ: LNET) today announced its intention to offer, subject to market and other conditions, shares of Series B Cumulative Perpetual Convertible Preferred Stock, with a liquidation preference of $1,000 per share, with an aggregate liquidation preference of $50 million, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company expects to grant the initial purchaser of the preferred stock a 30-day option to purchase up to an additional $7.5 million of the preferred stock, solely to cover over-allotments.

The preferred stock will be convertible into shares of the Company's common stock. The dividend rate, conversion price and other terms of the preferred stock will be determined by negotiations between the Company and the initial purchaser.

The principal purpose of the offering is to improve the Company’s consolidated leverage and interest coverage ratios. Accordingly, LodgeNet expects to use half of the net proceeds of the offering to immediately reduce the outstanding balance on the term loan under its Credit Facility and use the balance of the proceeds for general working capital purposes, including further voluntary reductions of the term loan.

This notice does not constitute an offer to sell or a solicitation of an offer to buy securities (including the shares of common stock into which the securities are convertible) and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offers of the preferred stock will be made only by means of a private offering memorandum. The preferred stock and LodgeNet’s common stock issuable upon the conversion of the preferred stock have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.