Consolidated Communications Holdings, Inc. completed a refinancing of its secured term debt resulting in an extension of maturities and significant interest savings. Wells Fargo Securities, LLC was the left lead arranger and bookrunner. Morgan Stanley Senior Funding, Inc. was a joint lead arranger and joint bookrunner.
The company issued Incremental Term Loans in the aggregate amount of $910.0 million with a maturity of December 23, 2020. Proceeds will be used to pay off the outstanding principal amounts of approximately $400.0 million, which was scheduled to mature on December 31, 2017, and approximately $510.0 million, which was scheduled to mature on December 31, 2018.
The company also issued a revolving loan facility of $75.0 million with a maturity of December 23, 2018 replacing the previous $50.0 million facility that was scheduled to mature in June of 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 such term is defined in the Second Amended and Restated Credit Agreement).
The terms, conditions and covenants of the new Incremental Term Loan facility are materially consistent with those in the previous facility. The new Incremental Term Loan facility has an interest rate of LIBOR plus 3.25% with a 1.00% LIBOR floor and included 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, Chief Financial Officer. "The successful refinancing will provide approximately $5.0 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."
Consolidated Communications Holdings, Inc. is a leading communications provider within its six state operations of California, Illinois, Kansas, Missouri, Pennsylvania and Texas.