Uniti Group Inc. Announces Private Offering of Senior Notes

Rhea-AI Summary

Uniti Group Inc. (Nasdaq: UNIT) has initiated a $750 million offering of senior notes due 2029. The funds will primarily finance a tender offer to purchase its 8.25% Senior Notes maturing in 2023. Any remaining proceeds may be used to reduce other debt obligations. The new notes are targeted at qualified institutional buyers and will not be publicly registered. Uniti continues to strengthen its market position in the communications infrastructure sector, owning 6.7 million fiber strand miles across the U.S.

Positive

• Proceeds of $750 million will fund the tender offer for 8.25% Senior Notes due 2023.
• Strengthens balance sheet by potentially reducing outstanding debt.

Negative

• Increase in debt risk if the tender offer is not completed as planned.

LITTLE ROCK, Ark., Jan. 19, 2021 (GLOBE NEWSWIRE) -- Uniti Group Inc. (the “Company”, “Uniti”, or “we”) (Nasdaq: UNIT) today announced that its subsidiaries, Uniti Group LP, Uniti Group Finance 2019 Inc. and CSL Capital, LLC (together, the “Issuers”), have commenced an offering of $750 million aggregate principal amount of senior notes due 2029 (the “new notes”). The new notes will be guaranteed on a senior unsecured basis by the Company and each of its subsidiaries (other than the Issuers) that guarantees indebtedness under the Company’s senior secured credit facilities and existing notes.

The Issuers intend to use the net proceeds from the offering of the new notes, together with cash on hand, to fund the purchase of up to $750 million aggregate purchase amount of their 8.25% Senior Notes due 2023 (the “outstanding notes”) in a tender offer (the “Tender Offer”) and to pay related fees and expenses. In the event the Tender Offer is not consummated on anticipated terms or at all, the Issuers intend to use any remaining proceeds to repay additional outstanding indebtedness. This press release does not constitute an offer to purchase or the solicitation of an offer to sell the outstanding notes.

The new notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act or any applicable state securities laws. The new notes will be offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act and outside the United States in compliance with Regulation S under the Securities Act.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

ABOUT UNITI

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry.  As of September 30, 2020, Uniti owns 6.7 million fiber strand miles and other communications real estate throughout the United States. Additional information about Uniti can be found on its website at www.uniti.com.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended from time to time. Those forward-looking statements include all statements that are not historical statements of fact, including those regarding the proposed offering of the new notes.

Words such as "anticipate(s)," "expect(s)," "intend(s)," “estimate(s),” “foresee(s),” "plan(s)," "believe(s)," "may," "will," "would," "could," "should," "seek(s)" and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could materially alter our expectations include, but are not limited to, the future prospects of Windstream Holdings, Inc. (together with Windstream Holdings II, LLC, its successor in interest, and its subsidiaries, “Windstream”); changes in the accounting treatment of our settlement with Windstream; our ability to delever and achieve the ‘covenant reversion date’ under our secured notes due 2025, which would permit us to pay additional dividends to shareholders; the ability and willingness of our customers to meet and/or perform their obligations under any contractual arrangements entered into with us, including master lease arrangements; the ability of our customers to comply with laws, rules and regulations in the operation of the assets we lease to them; the ability and willingness of our customers to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant; the adverse impact of litigation affecting us or our customers; our ability to renew, extend or obtain contracts with significant customers (including customers of the businesses we acquire); the availability of and our ability to identify suitable acquisition opportunities and our ability to acquire and lease the respective properties on favorable terms; the risk that we fail to fully realize the potential benefits of acquisitions or have difficulty integrating acquired companies; our ability to generate sufficient cash flows to service our outstanding indebtedness; our ability to access debt and equity capital markets (including to fund required payments pursuant to our settlement with Windstream); the possibility that the Tender Offer is not consummated on the anticipated terms, if at all; the impact on our business or the business of our customers as a result of credit rating downgrades and fluctuating interest rates; our ability to retain our key management personnel; our ability to qualify or maintain our status as a real estate investment trust (“REIT”); changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; covenants in our debt agreements that may limit our operational flexibility; our expectations regarding the effect of the COVID-19 pandemic on our results of operations and financial condition; other risks inherent in the communications industry and in the ownership of communications distribution systems, including potential liability relating to environmental matters and illiquidity of real estate investments; and additional factors described in our reports filed with the U.S. Securities and Exchange Commission.

Uniti expressly disclaims any obligation to release publicly any updates or revisions to any of the forward-looking statements set forth in this press release to reflect any change in its expectations or any change in events, conditions or circumstances on which any statement is based.

INVESTOR AND MEDIA CONTACTS:

Mark A. Wallace, 501-850-0866
Executive Vice President, Chief Financial Officer & Treasurer
mark.wallace@uniti.com

Bill DiTullio, 501-850-0872
Vice President, Finance and Investor Relations
bill.ditullio@uniti.com

FAQ

What are the details of Uniti's recent senior notes offering?

Uniti has announced a $750 million offering of senior notes due 2029, intended to finance the purchase of its 8.25% Senior Notes maturing in 2023.

How will Uniti use the proceeds from the new notes?

The net proceeds will fund a tender offer for up to $750 million of outstanding notes and cover related fees.

What are the risks associated with Uniti's new notes offering?

If the tender offer is not completed, Uniti may face increased debt obligations without the intended reduction.

Who can purchase the new senior notes offered by Uniti?

The notes are being offered only to qualified institutional buyers under Rule 144A and are exempt from registration.