RCN gets order approving fees for $460 million exit financing facility

By Jeff Pines

Washington, June 23 - RCN Corp.'s request to pay the fees for its proposed $460 million exit facility was approved, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of New York.

Judge Robert Drain approved the request over the objection of Vulcan Ventures Inc. and Wells Fargo & Co., both preferred shareholders.

RCN, a Princeton, N.J.-based telecommunications provider, previously obtained approval to submit the fees for the facility under seal. The court decided that publicly disclosing the fee and engagement letters could damage RCN because the letters contain sensitive information.

The exit facility includes a $285 million seven-year term loan facility at Libor plus 400 basis points, a five-year $25 million letter-of-credit facility at 4% with a 50 basis point commitment fee and a 71/2-year $150 million second-lien facility priced at Libor plus 800 basis points, according to a Securities and Exchange Commission filing.

RCN, which filed a pre-packaged Chapter 11 on May 27, expects to emerge in the fourth quarter. Its Chapter 11 case number is 04-13638.

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