Alaska Communications enters into $195 million senior credit facility

By Tali Rackner

Norfolk, Va., March 14 – Alaska Communications Systems Holdings, Inc. entered into a new $195 million senior credit facility with ING Capital LLC as administrative agent, according to a press release.

The facility includes a $120 million term loan tranche maturing in 2022 with an interest rate of Libor plus 500 basis points, a $60 million term loan tranche maturing in 2023 with an interest rate of Libor plus 700 bps and a $15 million revolving credit facility with an interest rate of Libor plus 500 bps.

Upon the satisfaction of certain conditions, on or before March 28, the facility will be funded, and parent company Alaska Communications Systems Group, Inc. will use the proceeds to fully repay the outstanding borrowings under its 2015 senior credit facilities totaling about $87 million and set aside an amount equal to the $94 million outstanding principal balance of its 6.25% convertible notes due May 1, 2018.

Alaska Communications expects to launch a tender offer to repurchase the convertible notes.

The facility includes two key financial covenant ratios that require the company to maintain a maximum net leverage coverage ratio of 3.75 times, stepping down over time, and a minimum fixed charge coverage ratio of 1.05 times.

Principal payments on the new term loans will be due quarterly, beginning on Dec. 31, 2017. The larger tranche begins amortization at the rate of 1.25% per quarter for about two years and stepping up thereafter, while the second tranche begins amortization at the rate of 0.25% per quarter for about three years and stepping up thereafter.

The facility also provides for incremental loans up to an additional $50 million, subject to applicable lender commitments.

Alaska Communications is an Anchorage-based provider of broadband and other wireline and wireless services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.