US ISP and telco Windstream intends to obtain US$300m in term loans, draw upon a US$1.25bn revolving credit facility and offer US$700m of senior-secured notes in an effort to refinance US$1.1bn of debt due this year.
Early this morning, the…
US ISP and telco Windstream intends to obtain US$300m in term loans, draw upon a US$1.25bn revolving credit facility and offer US$700m of senior-secured notes in an effort to refinance US$1.1bn of debt due this year.
Early this morning, the Nasdaq-listed company announced it would offer US$700m of senior secured notes due 2023 in a private placement. It expects to complete the offering, which will have a fixed interest rate, before the end of the month, subject to market and other conditions.
If placed successfully, the proceeds of the offering – and, if needed, available cash– will be used to pay the consideration for the company’s tender offer to buy the US$650m principal amount outstanding on existing 8.75% senior secured notes due 2017, issued by subsidiary Paetec Holding. The tender offer was also announced today. If note-holders tender less than US$650m in total, Windstream will use the proceeds of the new offering to redeem all or a portion of the Paetec notes or for general corporate purposes.
Shortly afterward, Windstream issued a second statement saying it is also seeking US$300m in term loans and considering accessing an as-yet-undrawn US$1.25bn revolving credit facility.
The company expects to secure the loans before the end of the month and use them to refinance existing term loans set to mature in July.
The revolver may be used to refinance US$800m in senior notes set to mature later in the year.
Commenting on the refinancing measures, Windstream CFO Tony Thomas said: “Collectively, the debt transactions announced today improve our liquidity position and lower our cost of capital, positioning us very well from a balance sheet perspective as we enter 2013.”
Moody’s has assigned a Ba3 rating to the proposed €700m notes and a Baa3 rating to the proposed US$300m term loan. The agency has also changed its outlook for the company from negative to stable.
