Wells, Morgan Stanley Arrange Consolidated Communications Refi
Consolidated Communications Holdings announced it completed a refinancing of its secured term debt, resulting in an extension of maturities and significant interest savings.
Wells Fargo Securities was the left lead arranger and bookrunner. Morgan Stanley Senior Funding was a joint lead arranger and joint bookrunner.
The company issued Incremental Term Loans in the aggregate amount of $910 million with a maturity of December 23, 2020. Proceeds will be used to pay off the outstanding principal amounts of approximately $400 million, which was scheduled to mature on December 31, 2017, and approximately $510 million, which was scheduled to mature on December 31, 2018.
The company also issued a revolver of $75 million with a maturity of December 23, 2018, replacing the previous $50 million facility that was scheduled to mature in June 2016. The spread on the revolving loan facility consists of a range of 2.50% to 3.25% based upon the company’s “Total Net Leverage Ratio” (as defined in the second amended and restated credit agreement).
The new facility has an interest rate of LIBOR plus 3.25% with a 1.00% LIBOR floor and includes an original issue discount of 0.50%. The debt will be amortized at the same 1.0% rate per year.
“The existing bank market environment is attractive, and we viewed this as an opportunity to achieve some interest savings and extend our maturities,” said Steve Childers, CFO. “The successful refinancing will provide approximately $5 million per year in annual interest savings going forward. The fourth quarter will include some non-recurring expenses tied to the refinancing. We were very pleased with support from our existing lenders as well as the new lenders who provided commitments.”
Mattoon, IL-headquartered Consolidated Communications Holdings is a communications provider with operations in California, Illinois, Kansas, Missouri, Pennsylvania and Texas.