Consolidated Communications Holdings eyes lower leverage, 'well positioned' for 2013, says CFO

By Lisa Kerner

Charlotte, N.C., Jan. 8 - Consolidated Communications Holdings, Inc.'s current leverage, including synergies from its acquisition of SureWest Communications, Inc. in July, is about four times.

"We are comfortable with that," said chief financial officer Steve Childers during a presentation Tuesday at the Citi 2013 Internet, Media and Technology Conference in Las Vegas.

However, Consolidated Communications has "a path" to get its leverage "to the mid threes" within the next three years.

During the presentation, Childers noted that 2012 was a busy year for Consolidated Communications, one in which the company produced very consistent results in comparison to its peer group and increased its interest in its wireless partnership investments.

"We did a refinancing in the fourth quarter that extended our 2014 maturities out to the end of 2017," Childers said.

"The net result is that we have no current debt maturities for five years or until the very end of 2017."

Specifically, the company issued $515 million of incremental term loans under an existing credit agreement and used the proceeds to pay the outstanding principal amount of $467.4 million that was scheduled to mature on Dec. 31, 2014 and to pay down the outstanding revolver in the amount of $35 million. The remainder was used for transaction fees and for general corporate purposes, the company announced previously.

In addition, Consolidated Communications has $75 million of NOLs from the SureWest acquisition that will diminish the cash taxes the company will be paying for "the next couple of years," according to Childers.

"We think we are well positioned going into 2013," said Childers, with a "very consistent playbook."

The company is focused on top-line revenue, including its broadband business and the $25 million of synergies from the integration of SureWest over the next two years.

"We feel like we are really on track and hitting all the timelines," said Childers.

To date, the company has met about half of the $25 million target.

Consolidated Communications is a Mattoon, Ill.-based rural local exchange company providing voice, data and video services.

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