By Paul A. Harris
Portland, Ore., May 19 – Xplornet Communications, Inc. priced an upsized $230 million issue of five-year senior PIK notes (Caa2/CCC) at par to yield 9 5/8% on Friday, according to a syndicate source.
The issue size was increased from $225 million.
The issue pays a 9 5/8% cash coupon which steps up by 100 bps, to 10 5/8%, when the issuer pays interest by means of the PIK option, which is permitted during the first two years, at the issuer's discretion.
The yield printed 12.5 bps beneath the tight end of the 9¾% to 10% yield talk.
SunTrust Robinson Humphrey Inc. was the left bookrunner. BMO Securities and Jefferies LLC were joint bookrunners.
The Woodstock, New Brunswick-based rural-focused broadband service provider plans to use the proceeds, along with a $75 million term loan add-on, to refinance its 13% senior PIK notes and finance the acquisition of Canadian satellite capacity on the ViaSat-2 satellite. The additional proceeds resulting from the $5 million upsizing of the deal will be used for general corporate purposes.
| Issuer: | Xplornet Communications, Inc.
|
| Amount: | $230 million, increased from $225 million
|
| Maturity: | June 1, 2022
|
| Securities: | Senior PIK notes
|
| Left bookrunner: | SunTrust Robinson Humphrey Inc.
|
| Joint bookrunners: | BMO Securities, Jefferies LLC
|
| Cash coupon: | 9 5/8%
|
| PIK coupon: | 10 5/8%
|
| Price: | Par
|
| Yield: | 9 5/8%
|
| Call: | Make-whole call at Treasuries plus 50 bps until June 1, 2019, then callable at 104.813
|
| Equity clawback: | 40% at 109.625 until June 1, 2019
|
| Trade date: | May 19
|
| Settlement date: | May 31
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 9¾% to 10% at par with 100 bps PIK step-up
|
| Marketing: | Roadshow
|
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