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Regions Agents Refinancing of Earthlink’s $135MM Credit Facility

July 05, 2016, 07:52 AM
Filed Under: Telecom
Related: Regions Bank

EarthLink Holdings Corp. has refinanced its $135 million revolving credit facility which otherwise would have matured in May 2017.  The new amended and restated credit facility provides for a $125 million revolving credit facility and a $50 million delayed draw term loan.  EarthLink’s current borrowing cost under the amended and restated credit facility is LIBOR plus 3.25%.  The amended and restated credit facility matures on June 30, 2021, except that if EarthLink’s existing 7-3/8% senior secured notes due 2020 have not been repaid in full by February 29, 2020, the maturity date will be February 29, 2020.  The term loan will be subject to quarterly amortization of principal. According to an SEC 8-K filing, Regions Bank served as administrative agent on the refinancing.

EarthLink also announced that it has delivered a notice of redemption for $90 million aggregate principal amount of its outstanding 8-7/8% Senior Notes due 2019 (CUSIP No. U2678F AA8) (the “Notes”).  The redemption will occur on August 4, 2016 and holders of the Notes to be redeemed will receive a redemption price equal to 102.219% of the principal amount of such Notes, plus accrued and unpaid interest to, but excluding, the redemption date.  Deutsche Bank Trust Company Americas, the trustee under the indenture governing the Notes, is sending a notice of redemption to all currently registered holders of the Notes.

To facilitate the redemption, EarthLink intends to use approximately $40 million of existing cash and draw down the $50 million term loan and up to $5 million under the revolving credit facility. EarthLink’s annualized debt service cost following these actions is expected to be $6 million lower than it is today. In addition EarthLink will recognize approximately $2.3 million in debt retirement expenses in the third quarter of 2016 in connection with the redemption.

EarthLink is a leading network services provider dedicated to delivering great customer experiences in a cloud connected world.

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