Alaska Communications Strengthens its Liquidity and Financial Flexibility, While Reducing Borrowing Rates, With Refinancing of its Debt
Established a single Term Loan of
$180 millionwith a reduced interest rate of LIBOR + 450 basis points (bps), replacing the previous A1 tranche at LIBOR + 500 bps and the A2 tranche at LIBOR + 700 bps, and extending the term to 2024 from 2022.
Increased the Revolving Credit Facility to
$20 millionat LIBOR + 450 bps from $15 millionat LIBOR + 500 bps.
Secured a new Delayed Draw Term Loan (“DDTL”) of
$25 millionat LIBOR + 450 bps, which is available for a period of twenty-four months, to be used specifically for success-based capital projects.
At close, net total debt available to the Company will be
$225 million, with $180 milliondrawn.
"In the context of a very volatile and challenging market situation, our ability to secure favorable terms while concurrently increasing our access to capital reflects our credit group’s confidence in the credibility of the Company’s business plan, and our ability to execute against that plan. Important highlights from the transaction include:
- Retiring the high cost A2 tranche while favorably repricing the new Term Loan compared to the A1 tranche.
- Extending the term loan by 2 years, creating even greater stability and certainty.
- Creating flexible capacity between the DDTL and Revolver to enable investment in meaningful growth opportunities we see ahead of us. The DDTL capacity is not for the purpose of financing acquisitions, but specifically targeted to strengthening our fiber footprint only in the support of contracted revenue opportunities.
- Resetting our key covenants while widening the thresholds and providing us with greater flexibility.
Creating an initial restricted payments basket of
$5 millionfor dividends or share buybacks, while allowing additional restricted payments from certain operating cash flows, allowing the Board to consider a range of shareholder friendly actions.
Our refinancing gives us the tools we need to execute to our organic
plan. This positions us well and in no way detracts our attention from
active consideration of appropriate strategic actions to enhance
shareholder value,” said
“ING is pleased to continue its great partnership with
This press release includes certain "forward-looking statements," as
that term is defined in the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on management's beliefs
as well as on a number of assumptions concerning future events made
using information currently available to management. Readers are
cautioned not to put undue reliance on such forward-looking statements,
which are not a guarantee of performance and are subject to a number of
uncertainties and other factors, many of which are outside the Company’s
control. Such factors include, without limitation,
Heather Cavanaugh, 907-564-7722
Director, External Affairs and Corporate Communications
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations