Southern regional CLEC itcd announced today that it would raise $325M in senior notes due 2016. They quickly priced them at 10.50%, and expect to finish the transaction this week. They will use the funds primarily to refinance their current credit facilities. If all this sounds familiar, it's because it is.
Just last month they began the same process looking for the same amount for the same purpose, even offering a pre-announcement of their Q4 earnings. Then a week or so later they backed off, citing deteriorating market conditions, prompting me to speculate a bit about potential M&A activity. So why the redux? Perhaps market conditions improved again, or perhaps those theorized M&A discussions fell through.
One thing is for sure, Deltacom really wants to break free from the restrictive covenants imposed by their credit facility. The new debt won't be saving them any money.
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