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Knology to launch $580 million credit facility Thursday
By Sara Rosenberg
New York, Feb. 13 - Knology Inc. is scheduled to hold a bank meeting on Thursday with a 1:30 p.m. ET start in New York to launch its proposed $580 million senior secured credit facility, according to a market source.
Credit Suisse is the lead bank on the deal.
The facility consists of a $25 million five-year revolver and a $555 million five-year term loan B, with both tranches talked at Libor plus 250 basis points, the source said.
The revolver carries an unused fee of 50 bps that can drop to 37.5 bps if more than $12.5 million is drawn.
Proceeds from the credit facility will be used to fund the $255 million acquisition of PrairieWave Communications and refinance the company's existing first-and second-lien credit facility.
The credit facility will not be drawn down immediately at close since the acquisition of PrairieWave is not expected to be completed until around April 15, and even that expected closing date could be wrong due to the necessary regulatory approvals.
Due to this delay in funding, the revolver and the term loan B both have a ticking fee of 50 bps from May 1 through June 30. This ticking fee will be revised to half the coupon on July 1, the source remarked.
The company is launching the credit facility now, as opposed to waiting until closer to the acquisition completion date, because of favorable loan market conditions, the source added.
Knology is a West Point, Ga., provider of interactive communications and entertainment services. PrairieWave is a Sioux Falls, S.D., provider of telephone, cable television, internet, phone directory and cable advertising services.
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