By Paul Deckelman
New York, Nov. 6 – Windstream Holdings Inc. priced $400 million of 8 5/8% senior first-lien notes due 2025 (B2/BB-/BB+) on Monday, high-yield syndicate sources said.
The issue was upsized from an originally announced $250 million.
The notes priced at 99 – in line with their price talk – to yield 8.802%.
The Rule 144A/Regulation S for life transaction was brought to market via left lead bookrunner Citigroup Global Markets Inc., with BNP Paribas Securities Corp., Bank of America Merrill Lynch, J.P. Morgan Securities LLC, MUFG Securities Americas, Inc. and SunTrust Robinson Humphrey, Inc. also acting as bookrunners.
The company said in a regulatory filing that the new notes will be issued by its Windstream Services, LLC and Windstream Finance Corp. subsidiaries as additional notes under an indenture covering the issue of 8 5/8% senior first-lien notes due 2025, which Windstream expects to be issued under the terms of an exchange offer that the company made to the holders of its existing 2020 and 2021 notes, and all such 8 5/8% notes will be treated as a single class. The new notes will be fungible with the notes being issued as part of the exchange offer if they are issued within 13 days of the issuance date of exchange offer notes.
The notes will have the same guarantors and security as the company’s existing senior secured credit facility.
They will be non-callable for the first three years, other than via a make-whole call at 50 basis points over the Treasuries rate, and will become callable Oct. 31, 2020 at 106.469. The notes will also have a three-year equity clawback provision for up to 35% of the issue and a 101% change-of-control put provision.
Windstream, a Little Rock, Ark.-based telecommunications services provider, plans to use the add-on deal proceeds to pay revolving credit facility debt.
| Issuer: | Windstream Holdings, Inc. (via its Windstream Services, LLC and Windstream Finance Corp. subsidiaries)
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| Amount: | $400 million (upsized from originally announced $250 million)
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| Security: | Senior first-lien notes
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| Maturity: | Oct. 31, 2025
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| Bookrunners: | Citigroup Global Markets Inc., BNP Paribas Securities Corp., Bank of America Merrill Lynch, J.P. Morgan Securities LLC, MUFG Securities Americas, Inc., SunTrust Robinson Humphrey, Inc.
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| Coupon: | 8 5/8%
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| Price: | 99
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| Yield: | 8.802%
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| Spread: | 656 bps versus UST 2.250% due Nov. 15, 2025
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| Call: | Non-callable (other than via make-whole call at Treasuries plus 50 bps) for three years; callable on or after Oct. 31, 2020 at 106.469; on or after Oct. 31, 2021 at 104.313; on or after Oct. 31, 2022 at 102.156; and on or after Oct. 31, 2023 at par
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| Equity clawback: | For up to 35% on the issue at 108.625 until Oct. 31, 2020
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| Change-of-control: | Investor put at 101
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| Trade date: | Nov. 6
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| Settlement date: | Nov. 8 (T+2)
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| Ratings: | Moody’s: | B2
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| S&P: | BB-
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| Fitch: | BB+
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| Distribution: | Rule 144A/Regulation S for life
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| Price Talk: | 99 area
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| Marketing: | Nov. 2 investor call
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