Otelco to get $100 million-plus term loan add-on for Country Road purchase

By Sara Rosenberg

New York, Aug. 7 - Otelco Inc. is planning on getting a $100 million-plus term loan add-on to fund its acquisition of Country Road Communications LLC, an informed source told Prospect News on Thursday.

The add-on will be large enough to fund the $101.329 million cash purchase price for Country Road plus whatever is needed for fees.

Pricing on the add-on will be Libor plus 400 basis points, and in connection with this deal, pricing on the company's existing $64.6 million term loan and $15 million revolver will increase to Libor plus 400 bps from their current rate of Libor plus 200 bps, the source said.

It is possible that the company may choose to downsize its existing undrawn revolver in conjunction with getting the new debt since it doesn't need that much liquidity, the source remarked.

GE Commercial Finance's media, communications and entertainment business is leading the term loan add-on. The company's other existing lender, CoBank, has also committed to the add-on, and a few additional lenders are already in place to support the deal as well.

Closing on the acquisition is expected to take place in the fourth quarter, subject to customary conditions, regulatory approvals and funding of the senior debt commitment.

Otelco is an Oneonta, Ala., provider of wireline telephone services. Country Road is a provider of advanced telecommunications services.

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