Cincinnati Bell solicits bids to amend 7% notes due 2024, 8% notes due 2025

By Rebecca Melvin

New York, June 15 – Cincinnati Bell Inc. announced the start of consent solicitations regarding proposed amendments to the indentures governing its 7% senior notes due 2024 and 8% senior notes due 2025, according to a company news release.

The changes are being sought in connection with a previously announced proposed acquisition by Macquarie Infrastructure Partners of the company with certain funds managed by the private equity group of Ares Management Corp. Ares has agreed to provide equity financing for the acquisition.

Adoption of the proposed amendments is not a condition to the acquisition being completed.

Specifically, the company is seeking to amend the change-of-control definition in the indentures so that the acquisition does not constitute a change of control. In addition, a definition would be added allowing MIP, Ares and their affiliates as permitted holders.

The consent solicitations will expire at 5 p.m. ET on June 19.

Only holders of record of the notes as of 5 p.m. ET on June 12 are eligible to deliver consents.

Currently the occurrence of a change of control under each applicable indenture would require the company to make an offer to each holder to repurchase their 2024 and 2025 notes for 101% of the principal amount plus accrued and unpaid interest.

If the requisite consents are obtained, the company will make a cash payment of $2.50 per $1,000 principal amount of notes in respect to the 2024 notes and 2025 notes.

The company will make the payment substantially concurrently with the acquisition, which is expected to be completed in the first half of 2021.

In addition, with the requisite consents, the issuer will secure the notes and the related guarantees on a pari-passu basis with the senior secured credit facilities and add a covenant to each indenture that prohibits the issuer from redeeming all or part of the applicable series of notes prior to Sept. 15, 2021 for the 2024 notes and prior to Oct. 15, 2021 together with the collateral for the 2025 notes. The terms of the indentures permit the other beneficial provisions to be provided to the holders without their consent.

The proposed amendments and the optional redemption restriction will be effected by supplemental indentures to be entered into by the company, the guarantors and the trustee as soon as practicable, but they will not become operative until the acquisition is completed.

For the proposed amendments to be implemented, the company must receive valid consents of at least a majority of the principal amount of the notes. Holders who do not deliver consents prior to the deadline shall be bound by the applicable proposed amendments and shall benefit from the other beneficial provisions if the indenture changes become operative.

The consents are not contingent on each other, and regardless of the outcomes, the notes will continue to be outstanding and will continue to bear interest as per the indentures, according to the release.

Cincinnati Bell is a Cincinnati-based owner, operator and developer of enterprise-class, carrier-neutral data center properties.

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