Cincinnati Bell launches $400 million term loan

By Sara Rosenberg

New York, Aug. 11 - Cincinnati Bell Inc. held a conference call for existing lenders only on Thursday to launch its proposed $400 million credit facility, according to a market source. Bank of America is the lead bank on the deal.

The term loan is priced with an interest rate of Libor plus 175 basis points, the source said.

Proceeds will be used to help fund the approximately $448 million repurchase of the company's outstanding 16% senior subordinated discount notes due 2009.

The company's existing revolver that was completed early this year will remain in place as is. No amendment to the revolver will be needed to allow for the new term loan since under the terms of the credit agreement, the company can incur up to $500 million of additional bank debt.

The note repurchase is conditioned on completion of financing.

As a result of lower interest expense, this refinancing, which is expected to close in the third quarter, is anticipated to increase free cash flow by $20 million to $25 million on an annualized basis.

Cincinnati Bell is a Cincinnati-based local exchange and wireless provider.

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