Cincinnati Bell discloses talk on $780 million credit facilities

By Sara Rosenberg

New York, Aug. 9 – Cincinnati Bell Inc. released price talk on its $780 million of senior secured credit facilities (Ba3) in connection with its lenders’ presentation on Wednesday, according to a market source.

The $180 million five-year revolver is talked at Libor plus 325 basis points to 350 bps with a 0% Libor floor, and the $600 million seven-year covenant-light term loan B is talked at Libor plus 325 bps to 350 bps with a 1% Libor floor and an original issue discount of 99 to 99.5, the source said.

The term loan B has 101 soft call protection for six months and amortization of 1% per annum.

Morgan Stanley Senior Funding Inc., PNC Bank, Regions Bank, Barclays, Citigroup Global Markets Inc. and Citizens Bank are the joint lead arrangers and bookrunners on the deal.

Commitments are due on Aug. 17, the source added.

Proceeds will be used to help fund the acquisitions of Hawaiian Telcom Inc. and OnX Enterprise Solutions and refinance debt at Cincinnati Bell and Hawaiian Telcom.

Under the agreement with Hawaiian Telcom, Cincinnati Bell is buying the company for about $650 million. Hawaiian Telcom shareholders will have the option to elect either $30.75 in cash, 1.6305 shares of Cincinnati Bell common stock, or a mix of $18.45 in cash and 0.6522 shares of Cincinnati Bell common stock for each share of Hawaiian Telcom, subject to proration such that the aggregate consideration to be paid to Hawaiian Telcom shareholders will be 60% cash and 40% Cincinnati Bell common stock.

As for OnX, Cincinnati Bell agreed to purchase the company for around $201 million in cash on a cash-free, debt-free basis.

The Hawaiian Telcom transaction is expected to close in the second half of 2018, and the OnX transaction will close in the beginning of the fourth quarter 2017. Both transactions are subject to regulatory approvals and other customary conditions.

Cincinnati Bell is a Cincinnati-based provider of integrated communications solutions. Hawaiian Telcom is a Honolulu-based provider of integrated communications, broadband, data center and entertainment solutions. OnX is a Toronto-based technology service and solution provider.

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