By Paul Deckelman
New York, March 25 - ITC^DeltaCom Inc. priced a quickly-shopped $325 million offering of six-year first-lien senior secured notes on Thursday - the same deal which the Huntsville, Ala.-based telecommunications company pulled from the market just six weeks earlier due to then-unfavorable market conditions.
The 10½% notes priced at 97.857 to yield 11%.
Price talk did not circulate on the deal, which was announced Thursday morning and then priced just hours later as a Rule 144A offering with registration rights.
The notes are secured by a first-priority lien on substantially all of the issuer's and its restricted subsidiary's existing and future assets.
The paper is not callable for the first three years after issue, other than a make-whole call at 50 basis points over Treasuries. However, the company may redeem up to 10% of the issue annually at 103% of principal during the non-call period. There is a change-of-control put provision at 101% of principal.
The deal came to market via bookruner Credit Suisse Securities (USA) LLC, which had also been a joint bookrunner on the original pulled deal, along with Jefferies & Co., Inc. However, Jefferies was not involved this time around.
ITC^DeltaCom had originally launched a virtually identical deal on Feb. 2, but by Feb. 10, amid worsening market conditions, including a substantial jump in the anticipated cost of doing the deal, the company announced that it was withdrawing its offering. Since that time, conditions have improved substantially, with spreads having tightened close to 100 bps in the interim, and, in fact, trading considerably tighter than they were when the company first floated its deal around the market.
It plans to use the deal proceeds to refinance existing bank debt and for general corporate purposes.
Issuer: ITC^DeltaCom, Inc.
| Issue: | First-lien senior secured notes
|
| Amount: | $325 million
|
| Maturity: | April 1, 2016
|
| Bookrunner: | Credit Suisse Securities (USA) LLC
|
| Coupon: | 10½%
|
| Price: | 97.857
|
| Yield: | 11%
|
| Spread: | 806 basis points
|
| Call features: | Non-callable for first three years, other than make-whole call at 50 basis points over Treasuries. However, company may redeem up to 10% of the issue annually at 103% of principal during non-call period.
|
| Change of control: | Put at 101% of principal plus accrued interest
|
| Trade date: | March 25
|
| Settlement date: | April 9
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A with registration rights |
|
| Marketing: | Quick to market
|
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