Consolidated Communications Holdings Inc. secured a new incremental term loan facility for its proposed acquisition of FairPoint Communications Inc.
The new incremental term loan facility provides that the company may incur in a single draw up to $935 million that would be drawn at closing of the pending acquisition, the company said Dec. 21. The new facility has an interest rate of LIBOR plus 3% and the greater of a 1% LIBOR floor and the three-month adjusted LIBOR rate.
The previously secured underwritten debt financing for the pending acquisition, that in addition to cash on hand and other sources of liquidity, would be used to repay and redeem certain FairPoint debt and pay fees and expenses associated with both the pending acquisition and related financing.
Consolidated Communications expects to close the acquisition by mid-2017, after obtaining the required regulatory approvals and the approval of shareholders of both companies. Ticking fees will start accruing to lenders providing the incremental term loan commitments on Jan. 15, 2017, equal to the interest rate of the incremental term loan facility. The incremental term loan facility is secured on a pari-passu basis with the existing credit facilities under the company's credit agreement.
Morgan Stanley Senior Funding Inc. was the left lead arranger and book runner. TD Securities (USA) LLC, MUFG and Mizuho Bank LTD were joint lead arrangers and joint book runners.