Alaska Communications buys back $41.3 million 9 7/8% notes via new term loan

By Jennifer Chiou

New York, July 18 - Alaska Communications Systems Group, Inc. said its subsidiary, Alaska Communications Systems Holdings, Inc., completed the repurchase of $41.3 million of its 9 7/8% senior unsecured notes due 2011 at $1,105.70 per senior note.

The agreement to repurchase $34.3 million in face value of notes announced on July 6 was included in the closing.

Alaska Communications Systems Holdings used a new $40.0 million term loan under its credit facility and cash on hand to finance the $41.3 million repurchase.

Also, Alaska Communications Systems Group entered into a $40.0 million notional amount fixed to floating swap arrangement, effectively fixing the rate on the new term loan at 6.42% for a period of six years.

"In completing this series of debt transactions, we have improved our interest coverage ratio and marginally reduced the level of gross debt," said chief financial officer David Wilson in a news release.

"These transactions reduce our current weighted cost of debt to approximately 6.8%, and we expect to realize a reduction in gross cash interest expense of $1.5 million per annum."

Anchorage-based Alaska Communications Systems is an integrated communications provider.

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