Alaska Communications obtains $100 million senior secured financing

By Alyssa Stahr

Chicago, Sept. 15 – Alaska Communications Systems Holdings, Inc. entered into a new $100 million senior secured credit facility to refinance its existing senior loan term on Sept. 14.

CoBank, ACB and ING Capital LLC were lead arrangers, according to a Sept. 15 release.

The credit agreement includes a $65 million first lien loan facility and a $10 million revolving credit facility, according to an 8-K filed with the Securities and Exchange Commission on Sept. 15. Pricing on the first lien facility is set at Libor plus 450 basis points with a Libor floor of 1%.

First lien facility quarterly prepayments are set at $250,000 in 2014 and $750,000 in each quarter of 2016. The quarterly prepayments increase by $250,000 in each subsequent year until maturity, the 8-K said.

CoBank is the first lien administrative agent.

The remainder of the facility is a $25 million second lien facility for which Crystal Financial, LLC is administrative agent.

Draws on the second lien loan will be at Libor plus 850 bps with a Libor floor of 1%.

The credit facilities are structured so that the second lien facility can be paid off prior to its maturity, leaving the first lien facility remaining, noted the 8-K.

The credit facility will mature in the first quarter of 2018, but will be extended if Alaska Communications has refinanced or repurchased its 6.25% convertible notes due May 2018 to leave no more than $30 million outstanding, has cash available for their payment at maturity and has issued any replacement notes with a maturity date on or after Jan. 1, 2021, and has achieved certain liquidity requirements.

Company chief financial officer Wayne Graham said that the company will have no debt maturing sooner than 2018 with the new financing, which has costs similar to the existing facility.

Proceeds were used to repay the existing $81.5 million term loan, to pay fees and expenses and for corporate purposes.

Headquartered in Anchorage, Alaska Communications is a provider of advanced broadband and IT managed services for Alaska-based businesses and consumers.

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