Daily News: January 16, 2019

ING Arranges $225MM Facilities for Alaska Comms Debt Refi

Alaska Communications refinanced its credit agreements and entered into new senior credit facilities totaling $225 million. ING Capital acted as sole book runner and joint-lead arranger on the transaction.

The new financing terms included a reduction in the company’s interest rates, a term extension, an increased capacity for shareholder friendly actions, a resetting and widening of key covenant thresholds and an incremental flexible capacity for success-based capital expenditures.

Other terms include:

  • A new single $180 million term loan with a reduced interest rate of LIBOR + 450 basis points (bps), replacing the previous A1 tranche at LIBOR + 500 bps and the A2 tranche at LIBOR + 700 bps
  • A term extension from 2022 to 2024
  • An increase in the revolving credit facility to $20 million at LIBOR + 450 bps from $15 million at LIBOR + 500 bps
  • A new delayed draw term loan of $25 million at LIBOR + 450 bps, which is available for a period of twenty-four months, to be used specifically for success-based capital projects
  • $180 million drawn at close
  • The retirement of the high cost A2 tranche while favorably repricing the new Term Loan compared to the A1 tranche.
  • The creation of an initial restricted payments basket of $5 million for dividends or share buybacks, while allowing additional restricted payments from certain operating cash flows, allowing the company’s board to consider a range of shareholder friendly actions

“In the context of a very volatile and challenging market situation, our ability to secure favorable terms while concurrently increasing our access to capital reflects our credit group’s confidence in the credibility of the Company’s business plan, and our ability to execute against that plan,” said Anand Vadapalli, president and CEO of Alaska Communications. “Our refinancing gives us the tools we need to execute to our organic plan. This positions us well and in no way detracts our attention from active consideration of appropriate strategic actions to enhance shareholder value.”

“ING is pleased to continue its great partnership with Alaska Communications as its lead lender, and we look forward to continuing our great partnership with the company. We believe the success of this transaction demonstrates that there are a group of thoughtful lending institutions that recognize Alaska Communications’ intrinsic value and long-term potential,” said Stephen Nettler, ING Capital managing director.

Alaska Communications is a broadband and managed IT services provider which provides cloud-enabled IT services throughout Alaska.