By Paul A. Harris
Portland, Ore., July 12 - WOW! Internet Cable and Phone priced a restructured $1.02 billion two-part notes transaction (Caa1/CCC+) on Thursday, according to syndicate sources.
Final pricing saw $25 million shifted to the senior tranche from the subordinated tranche.
The senior tranche was an upsized $725 million issue of seven-year senior notes which priced at par to yield 10¼%.
The senior piece was upsized from $700 million. The yield and reoffer price came on top of price talk which was tightened from earlier talk that had the notes pricing to yield 10¼% with a discount of zero to one point.
The subordinated tranche was a downsized $295 million issue of 13 3/8% senior subordinated notes due on Oct. 15, 2019 which priced at 98.337 to yield 13¾%.
The subordinated tranche was reduced from $320 million.
The coupon and yield came on top of revised talk. The reoffer price came slightly rich to the approximately 98.25 price talk. Talk on the subordinated notes widened from earlier talk which had them coming in the 13% area, including up to one point of original issue discount.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, SunTrust Robinson Humphrey Inc. and Mitsubishi UFJ Securities (USA) Inc. were the joint bookrunners.
WOW!, a Denver-based provider of residential and commercial high-speed internet, cable television and telephone services, issued the bonds through its WideOpenWest Finance LLC and WideOpenWest Capital Corp. entities as part of the funding for its pending acquisition of Knology Inc., a West Point, Ga.-based provider of interactive communications and entertainment services.
Under the agreement, WOW! will buy Knology for $19.75 per share in cash. The total transaction value is around $1.5 billion.
Besides the bond deal, financing for the acquisition includes a $2.12 billion credit facility and a $200 million equity contribution.
Some of the proceeds from the bonds will also be used to refinance debt.
The bond deal originally came into the market as a single $1.02 billion tranche of eight-year senior notes.
| Issuer: | WideOpenWest Finance, LLC/WideOpenWest Capital Corp. (WOW! Internet Cable and Phone)
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| Amount: | $1.02 billion
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| Proceeds: | $1.015 billion
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| Bookrunners: | Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, SunTrust Robinson Humphrey Inc., Mitsubishi UFJ Securities (USA) Inc.
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| Trade date: | July 12
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| Settlement date: | July 17
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| Ratings: Moody's: Caa1
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| Standard & Poor's: CCC+
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| Distribution: | Rule 144A and Regulation S with registration rights
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| Marketing: | Roadshow
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| Senior notes
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| Amount: | $725 million, increased from $700 million
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| Maturity: | July 15, 2019
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| Coupon: | 10¼%
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| Price: | Par
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| Yield: | 10¼%
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| Spread: | 928 bps
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| Call features: | Make-whole call at Treasuries plus 50 bps until July 15, 2015, then callable at 107.688, 105.125, 102.563, par on and after July 15, 2018
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| Equity clawback: | 40% at 110.25 until July 15, 2015
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| Change of control put: | 101%
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| Price talk: | 10¼% at par, tightened from 10¼% area with 0 to 1 point OID
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| Senior subordinated notes
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| Amount: | $295 million, decreased from $320 million
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| Proceeds: | $290.1 million
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| Maturity: | Oct. 15, 2019
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| Coupon: | 13 3/8%
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| Price: | 98.337
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| Yield: | 13¾%
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| Spread: | 1,277 bps
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| Call features: | Make-whole call at Treasuries plus 50 bps until July 15, 2015, then callable at 110.031, 106.688, 103.344, par on and after July 15, 2018
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| Equity clawback: | 40 at 113.375 until July 15, 2015
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| Change of control put: | 101%
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| Price talk: | 13 3/8% at approximately 98.25 to yield 13¾%, widened from 13% area including 0 to 1 point OID
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