Windstream tenders for $100 million total of 8 1/8%, 7 7/8% notes

By Toni Weeks

San Luis Obispo, Calif., March 26 –Windstream Services, LLC and Windstream Finance Corp. began a tender offer for up to a total of $100 million principal amount of their outstanding $400 million of 8 1/8% senior notes due 2018 and outstanding $1.1 billion of 7 7/8% senior notes due 2017, according to a press release.

The company will pay per $1,000 principal amount of notes $1,051.25 for the 8 1/8% notes and $1,090.00 for the 7 7/8% notes. The amounts include an early tender premium of $7.50 per $1,000 principal amount for notes tendered by 5 p.m. ET on April 8, the early tender deadline. Noteholders who tender after the early tender deadline but before the expiration date, 11:59 p.m. ET on April 22, will not receive the $7.50 premium.

The companies will also pay accrued interest up to, but excluding, the applicable settlement date, which is expected to be April 10 for the early tenders and April 23 for the final tenders.

When determining the amount of each series of notes to be purchased in the offers, the 8 1/8% notes will have first priority, and the 7 7/8% notes will have second priority. Acceptance priority may also be dependent on when the notes were tendered, the release noted.

Each purchaser will purchase half of the notes of each acceptance priority level. All tendered 8 1/8% notes will be accepted for purchase before any 7 7/8% notes, whether prior to the early deadline or prior to the expiration date. However, notes from either series that are tendered before the early deadline will have priority to any notes from either series tendered after the early deadline. The amount of notes purchased on the early settlement date or the final settlement date, as applicable, will be prorated if necessary so as not to exceed the tender cap.

The tender offers are subject to the purchasers J.P. Morgan Securities LLC and Bank of America Merrill Lynch being satisfied that the transactions contemplated by certain separation and distribution agreements among Windstream Holdings, Inc., Windstream Services and Communications Sales & Leasing, Inc. are reasonably likely to be completed 14 to 21 days after the acquisition of notes. The offers are also conditioned on the purchasers spending less than $2.4 billion to purchase some of Windstream’s outstanding revolving and term loans through open market loan repurchases during the offering.

JPMorgan (800 245-8812 or 212 270-1200 collect) and Bank of America Merrill Lynch (888 292-0070 or 980 388-3646 collect) are the underwriters. The information agent is Global Bondholder Services Corp (866 470-4500 or 212 430-3774 collect).

Windstream Services, LLC is the successor to Windstream Corp. It provides network communications to businesses and broadband, phone and digital TV services to consumers primarily in rural areas and is based in Little Rock, Ark.

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