WideOpenWest sets discount on $1.92 billion first-lien term B at 96

By Sara Rosenberg

New York, July 12 - WideOpenWest Finance LLC once again revised the original issue discount on its $1.92 billion first-lien term loan B, this time moving it to 96 from talk that came out on Thursday morning at 95¾ to 96, according to a market source. Previously the discount was outlined at 95, and at launch it was 981/2.

Pricing on the term loan B is Libor plus 500 basis points with a 1.25% Libor floor.

There is 101 soft call protection for one year.

The term loan B matures in six years after being shortened earlier from seven years.

The company's $2.12 billion credit facility (B1/B) also includes a $200 million five-year revolver.

At the time of the first discount change, covenants were modified, with the total leverage ratio reset at 6.75 times, versus 7 times previously, and the debt basket moved to $2.35 billion from $2.47 billion.

Furthermore, the company added a two-year blackout on certain sponsor dividends and restricted payments. Dividends and distributions from unrestricted subsidiaries after two years are subject to a 6.5 times total leverage ratio, down from 7 times previously.

In addition, the general restricted payments basket had been reduced to $25 million from $75 million.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., RBC Capital Markets, SunTrust Robinson Humphrey Inc. and Bank of Tokyo-Mitsubishi-UFJ Ltd. are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Knology Inc. for $19.75 per share in cash. The total transaction value is around $1.5 billion. Other funds for the purchase will come from $1.02 billion of notes and around $200 million of equity.

The notes are comprised of a $725 million seven-year senior tranche priced at 10¼% and issued at par and a $295 million 71/4-year senior subordinated tranche priced at 13¾% and issued at 98.337.

The senior tranche was upsized from $700 million and the subordinated tranche was downsized from $320 million.

Initially, the bonds were expected to come as a single $1.02 billion eight-year senior tranche but the deal was restructured on Tuesday.

Closing on the acquisition is subject to stockholder approval, which has already been obtained.

WideOpenWest, an Avista Capital Partners portfolio company, is a Denver-based provider of residential and commercial high-speed Internet, cable television and telephone services. Knology is a West Point, Ga.-based provider of interactive communications and entertainment services.

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