Consolidated Communications Announces Intention to Offer Senior Secured Notes

Rhea-AI Summary

Consolidated Communications Holdings (NASDAQ: CNSL) announced a plan to offer $1 billion in Senior Secured Notes due 2028 through its subsidiary, Consolidated Communications, Inc. The proceeds will be used to redeem existing 6.50% Senior Notes due 2022, repay debt under its credit facility, and cover related fees. The offering targets qualified institutional buyers and follows regulatory guidelines. The company's advanced fiber network supports its service offerings across 23 states, enhancing connectivity and technology solutions for various sectors.

Positive

• Intended use of proceeds includes redeeming higher interest debt, potentially reducing interest expenses.
• Offering $1 billion in Senior Secured Notes indicates strong market interest and potential for financial leverage.

Negative

• Substantial debt levels may pose risks to financial stability and operational flexibility.
• Market conditions and regulatory approvals for the offering may be uncertain, affecting execution timing.

MATTOON, Ill., Sept. 14, 2020 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (“Consolidated”) announced today that its wholly-owned subsidiary, Consolidated Communications, Inc. (the “Issuer”), intends, subject to market and other customary conditions, to offer (the “Offering”) $1 billion in aggregate principal amount of Senior Secured Notes due 2028 (the “Notes”).

Consolidated intends to use the net proceeds of the Offering to redeem all of the Issuer’s outstanding 6.50% Senior Notes due 2022, to repay a portion of outstanding borrowings under the Issuer’s existing credit facility and to pay related fees and expenses.

The Notes will be offered in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act, or any state securities laws, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

This press release is for informational purposes only and does not constitute an offer to sell the Notes, nor a solicitation for an offer to purchase the Notes or any other securities, nor shall there be any sales of Notes or other securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Consolidated Communications
Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a leading broadband and business communications provider serving consumers, businesses, and wireless and wireline carriers across rural and metro communities and a 23-state service area. Leveraging an advanced fiber network spanning 46,000 fiber route miles, Consolidated Communications offers a wide range of communications solutions, including: high-speed Internet, data, phone, security, managed services, cloud services and wholesale, carrier solutions. From our first connection 125 years ago, Consolidated is dedicated to turning technology into solutions, connecting people and enriching how they work and live. Visit www.consolidated.com for more information.

Forward-Looking Statements

Certain statements in this communication are forward-looking statements and are made pursuant to 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 anticipated 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 related to our business, including the uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the company’s business, results of operations, cash flows, stock price and employees; the possibility that any of the anticipated benefits of the proposed strategic investment from Searchlight or our refinancing of outstanding debt will not be realized; the outcome of any legal proceedings that may be instituted against the Company or its directors; the ability to obtain regulatory approvals and meet other closing conditions to the investment on a timely basis or at all, including the risk that regulatory approvals required for the investment are not obtained on a timely basis or at all, or are obtained subject to conditions that are not anticipated or that could adversely affect the Company or the expected benefits of the investment; the anticipated use of proceeds of the strategic investment; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valuation of pension plan assets; the 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 cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of acquisitions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; and liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the SEC, including our reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “will continue” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company and its subsidiaries to be different from those expressed or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this communication. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward-looking statements. You should not Page 4 of 4 place undue reliance on forward-looking statements.

Investor Relations Contact: Jennifer Spaude, 507-386-3765 investor@consolidated.com
Media Inquiries: media@consolidated.com

 

FAQ

What is the purpose of Consolidated Communications' $1 billion offering of Senior Secured Notes due 2028?

Consolidated Communications plans to use the proceeds to redeem existing Senior Notes, repay credit facility borrowings, and cover associated fees.

What are the risks associated with Consolidated Communications' offering of Senior Secured Notes?

Risks include substantial existing debt, potential market volatility, and the necessity of regulatory approvals.

Who are the target buyers for the Senior Secured Notes offered by CNSL?

The Notes will be offered primarily to qualified institutional buyers under Rule 144A and Regulation S.

What is the financial impact of redeeming the 6.50% Senior Notes due 2022 for CNSL?

Redeeming these notes could lower interest expenses, improving financial performance.

When are the Senior Secured Notes due and what is their total value?

The Senior Secured Notes are due in 2028 with a total offering amount of $1 billion.