Grande Communications inks notes purchase deal, eyes recapitalization

By Caroline Salls

Pittsburgh, Aug. 24 - Grande Communications Holdings, Inc. entered into a note purchase agreement with the requisite holders of $191.8 million of its $193 million in principal amount of outstanding senior notes under which the noteholders have agreed to sell their notes to the company upon completion of a proposed recapitalization agreement with ABRY Partners VI, LP, according to an 8-K filed with the Securities and Exchange Commission.

The participating noteholders include Serengeti Overseas Ltd., Serengeti Partners LP, Goldman, Sachs & Co., Silver Point Capital Offshore Fund, Ltd., Silver Point Capital Fund, LP, MAST OC I Master Fund LP, MAST Credit Opportunities I Master Fund Ltd. and Whitney Private Debt Fund, LP.

Under the purchase agreement, the noteholders have agreed to a purchase price of 101.5% of the principal amount of the notes, plus interest accrued through the purchase date, which is 200 basis points lower than what would have otherwise been required under the redemption provisions of the notes indenture.

In addition, the noteholders have agreed to waive all registration rights they may have on the senior notes or any equity securities of Grande.

According to the 8-K, ABRY has provided a limited guaranty of Grande's performance under the purchase agreement, which will terminate 10 business days after its execution if the recapitalization agreement has not been completed by that date.

Grande said closing is subject to the completion of ABRY's due diligence review, approval by Grande's board of directors and stockholders, the receipt of required approvals from the Federal Communications Commission and state public utility commissions, the receipt of contractually required third-party consents, the repayment of all of Grande's outstanding senior notes and the payoff of some of its outstanding capital lease obligations using a portion of the net proceeds from the equity and debt financing transactions.

Grande Communications is a San Marcos, Texas-based provider of high-speed internet, local and long-distance telephone and digital cable services.

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