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Three Paetec bonds targeted in change-of-control consent
By Paul A. Harris
Portland, Ore., Aug. 3 - On the heels of the announcement that Windstream Corp. has agreed to acquire Paetec Holding Corp., dealers are targeting three issues of Paetec's high-yield bonds in a change-of-control consent, which launched on Wednesday, according to an informed source.
The consent targets Paetec's outstanding 9½% senior notes due 2015, 8 7/8% senior secured notes due 2017 and 9 7/8% senior notes due 2018.
Holders of those bonds are being asked to waive the change-of-control puts.
A 0.25 point fee pool has been set up on each tranche. If participation in the consent on any particular tranche is greater than 50%, consenters will receive 0.5 points.
Consents are due by Aug. 16.
J.P. Morgan Securities LLC is managing the deal.
The consent also specifies that going forward only Windstream financials will be furnished, given Windstream's guarantee of Paetec's bonds.
As reported earlier, Windstream must amend its senior secured credit facility in order to provide the guarantee.
In the acquisition agreement, Paetec shareholders will receive Windstream common stock in exchange for their Paetec shares, and Windstream will assume or refinance Paetec's $1.4 billion of net debt.
Windstream said the transaction is valued at about $2.3 billion, and it has received $1.1 billion of committed financing.
The acquisition is expected to close in six months.
Paetec is a competitive local exchange carrier and provides telecommunications services primarily to business customers. It is based in Fairport, N.Y.
Windstream, based in Little Rock, Ark., is a communications and technology solutions provider.
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