RCN gets approval for $460 million exit facility

By Jeff Pines

Washington, June 10 - RCN Corp. obtained court approval for its $460 million exit financing package through Deutsche Bank Securities, Inc.

The order, filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York, allows the Princeton, N.J.-based telecommunications provider to pay the commitment fees and other expenses needed to secure the financing - and allows it to file the details under seal, which means RCN will not have to publicly disclose them.

The court decided that publicly disclosing the fee and engagement letters could damage RCN because the letters contain sensitive information.

The exit facility includes a $285 million seven-year term loan facility at Libor plus 400 basis points, a five-year $25 million letter of credit facility at 4% with a 50 basis point commitment fee and a 7½ year $150 million second-lien facility priced at Libor plus 800 basis points, according to a filing with the Securities and Exchange Commission.

RCN, which filed a pre-packaged Chapter 11 on May 27, expects to emerge in the fourth quarter. Its Chapter 11 case number is 04-13638.

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