Alaska Communications Systems Holdings entered into a new senior credit facility with ING Capital as administrative agent.

The facility provides for term loans including a $120 million tranche maturing in 2022 with an interest rate of LIBOR plus 5% and a $60 million tranche maturing in 2023 with an interest rate of LIBOR plus 7%, in addition to a $15 million revolving credit facility with an interest rate of LIBOR plus 5%.

Upon the satisfaction of certain standard conditions, on or before March 28, 2017, the 2017 senior credit facility will be funded and Alaska Communications will use the proceeds to repay in full the outstanding borrowings under its 2015 senior credit facilities totaling approximately $87 million, set aside an amount equal to the $94 million outstanding principal balance of its 6.25% convertible notes due May 1, 2018.

Principal payments on the new debt will be due quarterly commencing December 31, 2017. The larger tranche begins amortization at the rate of 1.25% per quarter for approximately two years and stepping up thereafter, while the second tranche begins amortization at the rate of 0.25% per quarter for approximately three years and stepping up thereafter.

“We are pleased to announce we have closed an agreement extending our senior debt maturities to 2022 and 2023, and, subject to certain limitations, providing for the repurchase of the convertible notes. The cost of borrowing under the 2017 senior credit facility is similar to that of our 2015 senior credit facilities, which was scheduled to mature next year. We look forward to working with this group of lenders who can support our business over the long term,” said Alaska Communications SVP of Finance Laurie Butcher.