Cincinnati Bell extends consent time again for 7% notes due 2024, 8% notes due 2025

By Rebecca Melvin

New York, June 25 – Cincinnati Bell Inc. is extending again the consent solicitation period 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 expiration time is now 5 p.m. ET on June 30, which was extended from 5 p.m. ET on June 25 and 5 p.m. ET on June 19.

As of 5 p.m. ET on June 24, the company had consents tied to $224,418,000 principal amount of the 2024 notes, representing 35.91% of the total deal, and $146.23 million principal amount of the 2025 notes, representing 41.78% of the deal.

In addition, the structure of the consent fees was modified, with a cash payment of $2,812,500 payable to holders of the 2024 notes that are tendered and not revoked, and a cash payment of $1,050,000 payable to holders of the 2025 notes that are tendered and not revoked.

The revised consent fees represent an increase of $4.50 per $1,000 principal amount of 2024 notes and $3.00 per $1,000 principal amount of the 2025 notes.

If the requisite consents are obtained, the company will pay the revised consent fees substantially concurrently with the completion of its previously announced acquisition expected in the first half of 2021.

As previously reported, changes are being sought in connection with its 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.

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.

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.

D.F. King & Co., Inc. is the information and tabulation agent (212 269-5550, 866 388-7452, cbb@dfking.com).

The solicitation agent is Goldman Sachs & Co. LLC (212 902-6351).

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

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