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WOW! Internet/Knology $1.02 billion bonds expected to launch mid-to-late June
By Paul A. Harris
Portland, Ore., May 29 - The $1.02 billion offering of senior notes backing the acquisition of Knology Inc. by WOW! Internet, Cable & Phone is expected to launch in mid-to-late June, market sources say.
West Point, Ga.-based Knology has scheduled a June 26 special meeting seeking shareholders' approval of the sale, and the bond deal should come in close proximity to that event, according to a fund manager whose portfolio includes both high-yield bonds and bank loans.
Commitments for the bridge loan, which is capped at 11½%, were due last week, the investor said, adding that bridge lenders were offered a 75 basis points commitment fee, or 100 bps for commitments greater than $100 million.
As reported, the bridge interest starts at Libor plus 750 bps, with a 1¼% Libor floor, with 50 bps every 90 days after the closing date.
There is a funding fee of 1½% total earned in 25% increments every 90 days and a conversion fee of 2½% total earned in 25% increments every 90 days.
The bank portion of the financing, a $2.02 billion credit facility, could launch before the end of the present week, according to a sellside source familiar with the situation.
Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., RBC Capital Markets, SunTrust Robinson Humphrey Inc. and Bank of Tokyo-Mitsubishi-UFJ Ltd. are the leads in the debt financing.
Other funds for the buyout will come from around $200 million of equity.
Under the agreement, WOW! will buy Knology for $19.75 per share in cash. The total transaction value is around $1.5 billion.
WOW!, an Avista Capital Partners portfolio company, is a Denver-based provider of residential and commercial high-speed internet, cable television and telephone services. Knology is a provider of interactive communications and entertainment services.
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