Consolidated Communications Completes Debt Refinancing
October 05 2016 - 6:06PM
Consolidated Communications Holdings, Inc. (Nasdaq:CNSL)
(“Company”) announced today that it completed a refinancing of its
secured term debt resulting in an extension of maturities,
significant interest savings and an increase to its revolving loan
facility.
The Company issued Incremental Term Loans in the aggregate
amount of $900 million with a maturity of October 5, 2023.
Proceeds will be used to pay off the outstanding principal amount
of approximately $885 million, which was scheduled to mature on
December 23, 2020, and for fees and general corporate purposes.
The new Incremental Term Loan facility has an interest rate of
LIBOR plus 3.00% with a 1.00% LIBOR floor. The debt will be
amortized at the same 1.0% rate per year. The terms, conditions and
covenants of the new Incremental Term Loan facility are materially
consistent with those in the previous facility, except for the
secured leverage incurrence test, which was increased to 3.00 from
2.75 times to one.
The Company also issued a revolving loan facility of $110
million with a maturity of October 5, 2021 replacing the previous
$75 million facility that was scheduled to mature in December of
2018. 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 such term is defined in the Third Amended and
Restated Credit Agreement) and did not change as part of this
refinancing.
“The existing bank market environment is attractive and we
viewed this as an opportunity to achieve interest savings, extend
maturities and enhance liquidity,” said Steve Childers, Chief
Financial Officer. “The successful refinancing will provide
more than $2 million per year in annual interest savings and
provides us with more flexibility for future acquisitions. We
were very pleased with support from our existing bank group as well
as from several new lenders.”
Wells Fargo Securities, LLC was the left lead arranger and
bookrunner. Morgan Stanley Senior Funding, Inc., Mizuho Bank
LTD. and TD Securities (USA) LLC were joint lead arrangers and
joint bookrunners.
About Consolidated Consolidated Communications
Holdings, Inc. is a leading broadband and business communications
provider throughout its 11-state service area. The Company
leverages its advanced fiber optic network and multiple data
centers to offer a wide range of communications solutions,
including data, voice, video, managed services, cloud computing and
wireless backhaul. Headquartered in Mattoon, IL, the Company
has been providing services in many of its markets for more than a
century.
Safe Harbor The Securities and Exchange
Commission (“SEC”) encourages companies to disclose forward-looking
information so that investors can better understand a company’s
future prospects and make informed investment decisions.
Certain statements in this press release are forward-looking
statements and are made pursuant to the safe harbor provisions of
the Securities Litigation Reform Act of 1995. These
forward-looking statements reflect, among other things, our current
expectations, plans, strategies, and anticipated financial results.
There are a number of risks, uncertainties, and conditions
that may cause our actual results to differ materially from those
expressed or implied by these forward-looking statements.
These risks and uncertainties include a number of factors
related to our business, including economic and financial market
conditions generally and economic conditions in our service areas;
various risks to shareholders of not receiving dividends and risks
to our ability to pursue growth opportunities if we continue to pay
dividends according to the current dividend policy; various risks
to the price and volatility of our common stock; changes in the
valuation of pension plan assets; the substantial amount of debt
and our ability to repay or refinance it or incur additional debt
in the future; our need for a significant amount of cash to service
and repay the debt and to pay dividends on the common stock;
restrictions contained in our debt agreements that limit the
discretion of management in operating the business; regulatory
changes, including changes to subsidies, rapid development and
introduction of new technologies and intense competition in the
telecommunications industry; risks associated with our possible
pursuit of acquisitions; system failures; losses of large customers
or government contracts; risks associated with the rights-of-way
for the network; disruptions in the relationship with third party
vendors; losses of key management personnel and the inability to
attract and retain highly qualified management and personnel in the
future; changes in the extensive governmental legislation and
regulations governing telecommunications providers and the
provision of telecommunications services; telecommunications
carriers disputing and/or avoiding their obligations to pay network
access charges for use of our network; high costs of regulatory
compliance; the competitive impact of legislation and regulatory
changes in the telecommunications industry; and liability and
compliance costs regarding environmental regulations. A detailed
discussion of these and other risks and uncertainties that could
cause actual results and events to differ materially from such
forward-looking statements are discussed in more detail in our
filings with the Securities and Exchange Commission, including our
reports on Form 10-K and Form 10-Q. Many of these
circumstances are beyond our ability to control or predict.
Moreover, forward-looking statements necessarily involve
assumptions on our part. These forward-looking statements
generally are identified by the words “believe”, “expect”,
“anticipate”, “estimate”, “project”, “intend”, “plan”, “should”,
“may”, “will”, “would”, “will be”, “will continue” or similar
expressions. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of Consolidated
Communications Holdings, Inc. and its subsidiaries to be different
from those expressed or implied in the forward-looking statements.
All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
the cautionary statements that appear throughout this press
release. Furthermore, forward-looking statements speak only
as of the date they are made. Except as required under the
federal securities laws or the rules and regulations of the
Securities and Exchange Commission, we disclaim any intention or
obligation to update or revise publicly any forward-looking
statements. You should not place undue reliance on
forward-looking statements.
Company Contact:
Matt Smith
VP of Finance & Treasurer
217-258-2959
matthew.smith@consolidated.com
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