Size of $450 million emerges on FairPoint Communications' proposed credit facility

By Sara Rosenberg

New York, May 28 - A size of $450 million surfaced in a form 8-K on Friday for FairPoint Communications Inc.'s proposed credit facility that will be obtained in connection with the initial public offering of its Income Deposit Securities (IDS).

The facility (B2) will consist of a $100 million revolver and a $350 million term loan, the Securities and Exchange Commission filing added.

Deutsche Bank is left lead on the loan.

Proceeds from the term loan, combined with proceeds from the $750 million IDS offering, will be used to repay all outstanding loans under the existing credit facility and to fund the repurchase of all outstanding senior notes and senior subordinated notes.

More specifically, $817.3 million will be used to repay existing debt, $113.2 million will be used to repurchase series A preferred stock, $10.5 million will be used as a cash reserve for discontinued operations and $159 million will be used for other purposes, according to the filing.

CIBC World Markets, Citigroup Global Markets and Deutsche Bank Securities Inc. will be the joint book running managers for the IDS offering.

In addition, in connection with the IDS offering, the company expects to issue approximately $361.4 million principal amount of senior subordinated notes to the public and its existing equity holders.

FairPoint is a Charlotte, N.C., provider of telecommunications services.

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