WOW! launches $1.02 billion eight-year bonds for Knology acquisition

By Paul Deckelman

New York, June 21 - WOW! Internet, Cable & Phone began a roadshow Thursday to shop its $1.02 billion offering of eight-year senior notes around to prospective investors, high-yield syndicate sources said.

There was no immediate word on how long the roadshow would last or when the mega-deal might be priced.

The deal will come to market via book-running managers Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC, SunTrust Robinson Humphrey, Inc. and Bank of Tokyo - Mitsubishi-UFJ Ltd.

The notes will be marketed under Rule 144A and Regulation S with registration rights.

The bonds will be non-callable for the first four years after issue and then can be called at par plus half the coupon.

There is an equity clawback provision allowing for the company to use proceeds from any equity sales to buy back up to 40% of the issue - versus the standard 35% seen in most bond issues - for the first three years after issue.

There is also a standard change-of-control indenture provision allowing investors to put the bonds back to the company for 101% of the principal amount plus accrued interest.

WOW!, a Denver-based provider of residential and commercial high-speed internet, cable television and telephone services, is selling the bonds through its WideOpenWest Finance LLC entity as part of the funding for its pending acquisition of Knology Inc., a West Point, Ga.-based provider of interactive communications and entertainment services.

Under the agreement, WOW! will buy Knology for $19.75 per share in cash. The total transaction value is around $1.5 billion.

Besides the bond deal, financing for the acquisition includes a $2.12 billion credit facility and a $200 million equity contribution.

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