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Windstream Holdings increases add-on term loan B-6 to $600 million
By Sara Rosenberg
New York, Nov. 22 – Windstream Holdings Inc. upsized its add-on term loan B-6 due March 2021 to $600 million from $450 million, according to a market source.
Pricing on the add-on term loan is Libor plus 400 basis points with a 0.75% Libor floor and an original issue discount of 99.
The add-on loan has 101 soft call protection for six months.
J.P. Morgan Securities LLC is the lead bank on the deal.
The add-on loan is being done in connection with Windstream’s merger with EarthLink Holdings Corp.
Proceeds will be used to refinance debt, including EarthLink’s existing third-party debt under its June 30, 2016 credit facility and EarthLink’s 8 7/8% notes due 2019 and 7 3/8% notes due 2020.
Under the merger agreement, EarthLink shareholders will receive 0.818 of a share of Windstream common stock for each EarthLink share owned. Windstream expects to issue about 93 million shares of stock valued at roughly $673 million, based on the company’s closing stock price on Nov. 4.
The transaction is valued at about $1.1 billion, including debt.
At closing, Windstream shareholders will own about 51% and EarthLink shareholders will own around 49% of the combined company.
Including run-rate synergies, on a pro forma basis for the 12 months ended Sept. 30, the combined company would have a net leverage ratio of 3.2 times.
Closing is expected in the first half of 2017, subject to customary conditions, including approval by the Federal Communications Commission, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, applicable state-level regulatory approvals and approval by Windstream and EarthLink shareholders.
Windstream is a Little Rock, Ark.-based provider of advanced network communications and technology solutions. EarthLink is an Atlanta-based network services provider.
The combined company, which will retain the Windstream name, will be based in Little Rock, Ark.
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