Deltacom Makes Up Mind, Raises $325M

March 25th, 2010 by · 2 Comments

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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Categories: CLEC · Financials

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2 Comments So Far


  • Anonymous says:

    A couple of interesting new points from Deltacom’s released 10-K…

    Our network included 27 completed metro fiber rings and eight metro fiber rings which were under construction at December 31, 2009.

    “Our Business Strategy” Pursue a disciplined and selective acquisition and market expansion strategy. We seek to supplement our internal growth by pursuing disciplined and selective acquisition and market expansion opportunities that we believe will enable us to add customers, increase market penetration, enhance product capabilities and achieve network efficiencies.

    • Rob Powell says:

      Yes, I saw that mention of metro ring construction and have been wondering where they are doing it and by what means. It does seem to imply that they are seeing more fiber in their diet down the line.

      As for growing via acquisition… that seems more boilerplate than anything else. I don’t think they really have the firepower at the moment. But I guess you never know.

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