Windstream extends consent bid for 6 3/8% notes due 2023 by one day

By Susanna Moon

Chicago, Nov. 3 – Windstream Holdings, Inc. said it extended the consent solicitation for its 6 3/8% senior notes due 2023 by one day until 5 p.m. ET on Nov. 3.

As announced, Windstream is seeking consents from holders of four note series to waive alleged defaults for transactions related to the spinoff of Uniti Group, Inc. and to amend the indentures governing the notes to give effect to those waivers and amendments.

Based on consents received to date for the 6 3/8% notes, Windstream expects to secure the needed majority of consents for the 6 3/8% notes after settling the exchange for its 7¾% senior notes due 2021 and the exchange for its 7½% senior notes due 2022 and 7½% senior notes due 2023, according to the Thursday update.

For the 6 3/8% senior notes due 2023, the early consent deadline was previously extended to coincide with the offer expiration at 5 p.m. ET on Nov. 2, pushed back from 5 p.m. ET on Oct. 31. The early consent deadline was previously 5 p.m. ET on Oct. 31 and before that Oct. 27 and Oct. 24.

The change for the 6 3/8% notes means that holders will receive the early consent payment of $2.50 per $1,000 principal amount regardless when they tender their notes.

The company previously also revised the terms of the solicitation for the 6 3/8% notes to provide that the proposed waivers and amendments will become effective and operative upon receipt of the required consents for the 6 3/8% notes and not dependent on securing consents for any other series.

As announced Oct. 30, the company cut the minimum issuance condition for the new notes to $247 million from $282 million. Before that, the terms stipulated that at least $587 million of new notes be issued.

Meanwhile, the maximum exchange amount for the 7¾% senior notes due 2021 is now also $247 million, trimmed from $282 million and before that from $587 million.

The consent payment on offer is $2.50 per $1,000 principal amount.

Windstream is also soliciting consents for its existing 6 3/8% senior notes due 2023.

The solicitation is similar apart from the timing.

The early consent payment is $2.50 per $1,000 principal amount, and the subsequent consent payment is $2.00 per $1,000 principal amount.

For the notes covered by the exchange, the consent solicitation ended at 5 p.m. ET on Nov. 1, extended from 5 p.m. ET on Oct. 31 and before that from Oct. 27 and Oct. 24.

As previously announced, consents were received from holders of a majority of the 7¾% senior notes due 2020 and the 7½% senior notes due 2023 as of 5 p.m. ET on Oct. 24.

For those series, the proposed waivers and amendments will become operative when the company receives the required consents under the solicitation for the 6 3/8% notes

Meanwhile, the company extended the consent solicitations for its 7¾% senior notes due 2021 and 7½% senior notes due 2022 until 5 p.m. ET on Nov. 14.

Early exchange results

On Nov. 2 the issuer announced the early tender results of its exchange offers as of 5 p.m. ET on Oct. 31.

As announced on Oct. 19, the offers cover the company’s $650,947,000 of 7¾% senior notes due 2020, $809.31 million of 7¾% senior notes due 2021, $441,151,000 of 7½% senior notes due 2022 and $343,457,000 of 7½% senior notes due 2023.

For the 7½% senior notes due 2022 and 7½% senior notes due 2023, Windstream is offering new 6 3/8% senior notes due 2023.

The company will issue $1,080 of the new notes for each $1,000 principal amount of the 7½% senior notes due 2022 and $1,075 of new notes for each $1,000 principal amount of the 7½% senior notes due 2023.

Both figures include $50 of new notes per $1,000 that will be issued only to holders who participate by the early tender date of 5 p.m. ET on Oct. 31.

After that deadline, the amount on offer is $1,030 for the 2022 notes and $1,025 for the 2023 notes.

The exchange ends at 11:59 p.m. ET on Nov. 14.

As of the early deadline, holders had tendered $167,079,000 principal amount, or 38%, of the 2022 notes and $217,262,000 principal amount, or 63%, of the outstanding 2023 notes.

In exchange, the company will issue $413,857,000 principal amount of new 6 3/8% notes.

The company said it plans to accept for exchange all of the early tendered 2022 notes and 2023 notes.

For the 2021 notes, investors had tendered $211,685,000 principal amount, or 26%, of the outstanding 2021 notes.

The company expects to accept for exchange $179,871,000 of the 2021 notes on a prorated basis and in exchange issue $139,843,000 principal amount of new 6 3/8% notes and about $50 million principal amount of 8 5/8% senior first lien notes due 2025.

For the 2020 notes, the company received early tenders for $195,365,000 principal amount, or 30%, of the outstanding 2020 notes.

The issuer will accept for exchange $157.97 million principal amount of the 2020 notes on a prorated basis in exchange for about $150 million principal amount of new secured notes.

Windstream will also pay accrued interest up to but excluding the settlement date in cash.

The company previously said that it is carrying out the exchanges to extend its maturity profile and to “enhance its liquidity position over the coming years.”

More details

For the 7¾% senior notes due 2021, holders have two options.

They may choose new 6 3/8% senior notes due 2023, in which case the company will issue $1,100 principal amount of new notes for each $1,000 principal amount of existing notes.

Alternatively they may opt for new secured notes due 2021, in which case Windstream will issue up to $50 million of the new notes at the rate of $950 principal amount per $1,000 principal amount of existing notes.

If this option is oversubscribed, holders then have a further choice for any notes beyond those accepted for exchange into new secured notes. They may either exchange the excess notes for new 6 3/8% notes due 2023 at the rate of $1,100 principal amount of new notes for each $1,000 principal amount of existing notes or exchange the excess notes on the same terms subject to a cap on the new 6 3/8% notes of $587 million less the amount issued in the offer for the 2022 and 2023 notes and the amount issued under the first option for the 2021 notes. The cap is now reduced to $282 million.

As with the exchange for the 2022 and 2023 notes, all the amounts on offer include $50 of new notes per $1,000 that will only be issued to holders who participate by the early tender date of 5 p.m. ET on Oct. 31.

The exchange will remain open until 11:59 p.m. ET on Nov. 14.

Windstream will also pay accrued interest up to but excluding the settlement date in cash.

For Windstream’s 7¾% senior notes due 2020, holders will receive new secured notes due 2021 at the rate of $950 principal amount per $1,000 principal amount of existing notes.

The amount of new notes that may be issued is capped at $50 million.

As with the other exchanges, the amount on offer includes $50 of new notes per $1,000 that will only be issued to holders who participate by the early tender date of 5 p.m. ET on Oct. 31.

The exchange ends at 11:59 p.m. ET on Nov. 14.

Windstream will also pay accrued interest up to but excluding the settlement date in cash.

The early settlement date is now expected to be Nov. 3 but may be rescheduled, the company noted.

Windstream said it denies that the alleged default has occurred and has filed a complaint seeking a judicial declaration that there has been no default in connection with the spinoff and related transactions.

Global Bondholder Services Corp. (866 807-2200 or 212 430-3774) is information and exchange agent.

The company is also offering $250 million of new secured notes.

New issue challenge

As announced Nov. 1, Aurelius Capital Master, Ltd. is contesting the new 6 3/8% notes due 2023 to be issued under exchange offers, which it says may be prohibited by the notes indenture.

Specifically, the issue would breach the terms of the notes indenture that restricts Windstream’s incurrence of debt, according to a press release by Aurelius.

Aurelius said it expects to dispute the “validity” of the new 6 3/8% notes, possibly in court, and is issuing the notice “for the purpose of precluding any future holders of the new notes (whether acquired in the exchange offers or through subsequent resale) from asserting a defense that they acquired the new notes in good faith and without notice of any dispute as to the validity of new notes or defect in their issuance.”

Windstream is a Little Rock, Ark.-based networking and telecommunications company.

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