Alaska Communications refinances with $180 million term loan due 2024

By Angela McDaniels

Tacoma, Wash., Jan. 15 – Alaska Communications Systems Group Inc. refinanced two term loan tranches, increased its revolving credit facility and secured a new delayed-draw term loan, according to a company news release.

Under a new senior credit facility, the company established a $180 million term loan due 2024 with an interest rate of Libor plus 450 basis points. This replaced the A1 tranche at Libor plus 500 bps and the A2 tranche at Libor plus 700 bps, both of which were due 2022.

The revolver was increased to $20 million from $15 million, and its interest rate was reduced to Libor plus 450 bps from Libor plus 500 bps.

The credit facility provides for a new $25 million delayed-draw term loan at Libor plus 450 bps. It is available for 24 months and will be used to strengthen the company’s fiber footprint in the support of contracted revenue opportunities.

The company said that at closing, the net total debt available to it will be $225 million, with $180 million drawn.

Subsidiary Alaska Communications Systems Holdings, Inc. is the borrower. ING Capital LLC is the bookrunner and joint lead arranger.

The refinancing reset the company’s key covenants “while widening the thresholds and providing us with greater flexibility,” president and chief executive officer Anand Vadapalli said in the news release.

The refinancing also created “an initial restricted payments basket of $5 million for dividends or share buybacks, while allowing additional restricted payments from certain operating cash flows, allowing the board to consider a range of shareholder-friendly actions,” Vadapalli added.

Alaska Communications is an Anchorage-based provider of broadband and managed information technology services.

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