Consolidated Communications Announces New Term Loan Pricing

MATTOON, Illinois – () – Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) (“Consolidated” or the “Company”) today announced that its wholly-owned subsidiary, Consolidated Communications, Inc., has revised the price of its existing term loan, maturing in October 2027.

The Company entered into a second amendment to its credit agreement to refinance $ 999.9 million of its B term loan at LIBOR plus 3.50% with a LIBOR floor of 0.75%. The price revision of the term loan reduced the combined interest rate margin and the LIBOR floor by 1.5%.

This price review of the Company’s term loan was executed in conjunction with the recent issuance of the Company’s $ 400 million 5,000% Senior Secured Notes offering, maturing in 2028 (the “Offering of tickets ”). As previously announced, the net proceeds from the offering of Notes were used to repay a portion of the term loan. The repayment was applied to the remaining amortization payments in direct order of maturity, eliminating annual amortization of approximately $ 14 million over the life of the loan.

The price revision, combined with the recent offering of notes, is expected to reduce annual cash interest by approximately $ 18 million per year. The maturity date of the term loan is October 2027. All other material provisions of the credit agreement remain unchanged.

“Given the current favorable capital market conditions and strong lender support, we have been opportunistic with the issuance of $ 400 million of new senior secured notes and with the pricing of our term loan. guaranteed, ”said Steve Childers, CFO of Consolidated Communications. “We are very pleased with the outcome which we believe will translate into annual cash interest savings of $ 18 million, while eliminating approximately $ 14 million in annual amortization on term loans.” We believe this action will further strengthen our already strong cash and liquidity position to further support our fully funded fiber construction plans. ”

The company is updating its 2021 forecast for cash interest expense to $ 130 million to $ 135 million. The historical outlook for cash interest expense ranged from $ 142 million to $ 152 million.

The Company completed a global refinancing in October 2020. In view of these transactions, a summary of our current capital structure is as follows:

  • a five-year revolving credit facility of $ 250 million

  • a guaranteed term loan totaling $ 999.9 million maturing in 2027

  • Senior secured notes totaling $ 1,150 million due 2028, of which:

    • $ 750 million in global capital at 6.5%

    • $ 400 million in aggregate capital at 5.0%

Wells Fargo Securities, LLC was the principal arranger for the refinancing of the term loan and Morgan Stanley Co. LLC was the leader of the bond offering.

Forward-looking statements

Certain statements contained in this press release are forward-looking statements and are made in accordance with the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies and expectations. financial results. There are a number of risks, uncertainties and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include a number of factors relating to our business, including uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on business, results of operations, cash flow, the stock price and employees of Consolidated; the possibility that one of the anticipated benefits of Searchlight Capital Partners, LP’s strategic investment will not materialize; the outcome of any legal proceedings that may be brought against Consolidated or its directors; the ability to obtain regulatory approvals and to meet other investment closing conditions on time or not at all, including the risk that the regulatory approvals required for the investment will not be obtained in a timely manner or not at all, or are obtained subject to conditions that are not anticipated or could adversely affect Consolidated or the expected benefits of the investment; the intended use of the proceeds of the strategic investment and placement; the economic and financial conditions of the markets in general and the economic conditions in our service areas; various risks to the price and volatility of our common shares; changes in the valuation of pension plan assets; our substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of liquidity to service and repay debt restrictions contained in our debt agreements which limit management discretion in the operation of the business; regulatory changes, including changes in subsidies, the rapid development and introduction of new technologies and intense competition in the telecommunications sector; the risks associated with our possible pursuit of acquisitions; system failures; cyber attacks, information or security breaches or technological failures of ours or a third party; losses of large customers or government contracts; risks associated with network rights-of-way; disruptions in the relationship with third party suppliers; the loss of key management personnel and the inability to attract and retain highly qualified managers and personnel in the future; changes in extensive government legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changed tax laws or regulations; telecommunications operators contesting and / or circumventing their obligations to pay network access charges for the use of our network; the high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications sector; and the costs of liability and compliance with environmental regulations; and the risks associated with stopping the payment of dividends on our common shares. A detailed discussion of these and other risks and uncertainties, which could cause actual results and events to differ materially from these forward-looking statements, is discussed in more detail in our filings with the SEC, including our Form 10-K and Form 10-Q reports. Many of these circumstances are beyond our ability to control or predict. In addition, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements are generally identified by the words “believe”, “expect”, “anticipate”, “estimate”, “plan”, “intend”, “plan”, “should”, “may”, “Will,” “would”, “will”, “continue” or similar expressions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of Consolidated and its subsidiaries to differ from those expressed or implied in the forward-looking statements. All forward-looking statements that are attributable to us or that are attributable to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release. In addition, forward-looking statements speak only as of the date on which they are made. Except as required by federal securities laws or the rules and regulations of the US Securities and Exchange Commission, we disclaim any intention or obligation to publicly update or revise any forward-looking statements. You should not place undue reliance on forward-looking statements.

About consolidated communications

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a leading provider of broadband and business communications serving consumers, businesses, and wireless and wireline operators in rural and metropolitan communities and in a 23 state service area. Leveraging an advanced fiber optic network spanning 46,600 kilometers of fiber route, Consolidated Communications is one of the top 10 fiber providers in the United States offering a wide range of communications solutions including: High Speed ​​Internet, Data , phone, security, managed services, cloud and wholesale services, transportation solutions. Since our first connection 125 years ago, Consolidated has been dedicated to transforming technology into solutions, connecting people and enriching the way they work and live. Visit www.consolidated.com for more information.


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