There has been a mini news blitz from telecoms accessing the credit markets in the last few days, implying that a real window has opened in the credit markets. If so, we can expect more activity over the next few days as those who need to take advantage of the opening. Let’s look quickly at the financial moves made by glbc, q, CenturyLink (NYSE:CTL, news, filings), and Zayo Group (news, filings) to start the week off.
First off, Global Crossing’s $650M private offering morphed into $750M. The new senior secured notes due 2015 will bear interest at 12% and were priced at 97.944% of par. They will use it to refinance their term loan facility and to buy back as many of the GC Impsat notes as they collect from their current tender offer by Sept 21. But even if they get it all, there will still be over $150M in extra cash left over. That’s not a lot when it comes to M&A, but it’s not chump change either and will give them some flexibility if nothing else.
Qwest offered $300M in notes on Monday morning, and by Monday evening they had placed $550M worth of them. And they say ILECs move slowly… The new notes are due in 2015, bear interest at 8%, and were priced at 98.244% of par. The proceeds will probably be used simply to continue to refinance parts of their balance sheet.
Not to be outdone, CenturyLink sold $650M in two parts. The first $250M were 6.15% senior notes due 2019, and the next $400M were 7.6% notes due 2039. The proceeds will be used to help repurchase up to $800M in existing debt with maturities ranging between 2010 and 2013 that they are tendering for concurrently. This is of course part of the cleanup of the combined balance sheets of CenturyTel and Embarq, as the company molds itself into its new form.
And last but not least, regional and metro fiber provider Zayo Group raised $30M of new debt from CoBank, Royal Bank of Canada, and SunTrust. The money will be used to fund the acquisition of Fibernet Telecom Group in part. Actually, Zayo raised $128M in the spring to pursue M&A targets, and spent only $91M or so of it so far. By my reckoning, that leaves them another $57M with which to find more assets to buy. No doubt they’ll manage to find something by Christmas.
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