Cincinnati Bell to refinance 16% notes, increase free cash flow by at least $20 million

By Kimberly N. Alleyne

Stroudsburg, Pa., Aug. 8 - Cincinnati Bell Inc. announced Monday that it has entered into an agreement to repurchase all of its outstanding 16% senior subordinated discount notes due 2009.

The company expects to finance the purchase of the 16% notes with new borrowings under its senior secured credit facilities.

Because of lower interest expense, this refinancing is expected to increase free cash flow by $20 million to $25 million on an annualized basis, the company said.

Cincinnati Bell expects to close the refinancing in the third quarter.

Upon closing, the company will have completed the second and final stage of its refinancing plan announced in January. Cincinnati Bell's obligation to repurchase the notes is conditioned upon the completion of the new financing.

The company expects to pay approximately $448 million, including accrued interest, to repurchase the notes. This will result in a third quarter pre-tax loss on debt elimination debt of $92 million, including a non-cash loss of $37 million.

Cincinnati Bell is headquartered in Cincinnati, Ohio, and provides telecommunications services to residential and business customers in Ohio, Kentucky and Indiana.

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