Uniti Group Inc. Announces Private Offering of Senior Secured Notes to Redeem a Portion of Outstanding 7.875% Senior Secured Notes due 2025

Rhea-AI Summary

Uniti Group Inc. (Nasdaq: UNIT) has announced an offering of $1,750 million in senior secured notes due 2028. The funds will primarily be used to partially redeem $1,422 million of their existing 7.875% senior secured notes due 2025 on March 4, 2023, along with related expenses. The new notes will be secured by first-priority liens on the Issuers' assets. This offering aims to strengthen Uniti’s financial position and optimize their debt. The New Notes will be exclusively available to qualified institutional buyers and are not registered under the Securities Act.

Positive

• Intended use of proceeds from the offering includes partial redemption of existing secured notes, improving debt structure.
• Positioning for enhanced financial stability through secured financing.

Negative

• Potential dilution of existing shareholders as new debt offerings may affect equity value.
• Dependence on successful completion of debt financing for the partial redemption.

LITTLE ROCK, Ark., Feb. 02, 2023 (GLOBE NEWSWIRE) -- Uniti Group Inc. (the “Company,” “Uniti,” or “we”) (Nasdaq: UNIT) today announced that its subsidiaries, Uniti Group LP, Uniti Fiber Holdings Inc., Uniti Group Finance 2019 Inc. and CSL Capital, LLC (together, the “Issuers”), have commenced an offering of $1,750 million aggregate principal amount of senior secured notes due 2028 (the “New Notes”). The New Notes will be guaranteed on a senior unsecured basis by the Company and on a senior secured basis by each of its subsidiaries (other than the Issuers) that guarantees indebtedness under the Company’s senior secured credit facility and the Company’s existing secured notes (except initially those subsidiaries that require regulatory approval prior to guaranteeing the New Notes). The New Notes and the subsidiary guarantees will be secured by first-priority liens on substantially all of the assets of the Issuers and the subsidiary guarantors (other than certain excluded assets), which liens also ratably secure the Company’s senior secured credit facility and existing secured notes.

The Issuers intend to use a portion of the net proceeds from the offering of the New Notes to fund the partial redemption (the “Redemption”) of Uniti’s outstanding 7.875% senior secured notes due 2025 (the “2025 Secured Notes”), including related premiums, fees and expenses in connection with the foregoing. The Issuers expect to redeem $1,422 million aggregate principal amount of the 2025 Secured Notes on March 4, 2023 (the “Redemption Date”) at a redemption price of 101.969% of the redeemed principal amount plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date. In connection with the pricing of the New Notes, the Issuers intend to issue a conditional notice of partial redemption for the 2025 Secured Notes, conditioned upon completion of one or more debt financings in an aggregate principal amount of at least $1.75 billion. This press release does not constitute a notice of partial redemption with respect to the 2025 Secured Notes. The Issuers intend to use the remaining net proceeds from the offering of the New Notes to repay outstanding borrowings under the Company’s revolving credit facility.

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 fiber and other wireless solutions for the communications industry. As of September 30, 2022, Uniti owns approximately 134,000 fiber route miles, 8.0 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 and financial health of Windstream Holdings, Inc. and subsidiaries, our largest customer; 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 and willingness of our customers to renew their leases with us upon their expiration, our ability to reach agreement on the price of such renewal or ability to obtain a satisfactory renewal rent from an independent appraisal, 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 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 and fund our capital funding commitments; our ability to access debt and equity capital markets; the possibility that the Redemption 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; 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, inflation and rising interest rates 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:

Paul Bullington, 251-662-1512
Senior Vice President, Chief Financial Officer & Treasurer
paul.bullington@uniti.com

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

FAQ

What is the purpose of Uniti's $1,750 million senior secured notes offering?

The offering aims to partially redeem existing senior secured notes and repay outstanding borrowings under the revolving credit facility.

What are the details of the redemption of the existing 2025 Secured Notes?

Uniti plans to redeem $1,422 million of the 2025 Secured Notes on March 4, 2023, at a redemption price of 101.969% of the principal amount.

Who can purchase the new notes issued by Uniti?

The New Notes are offered only to qualified institutional buyers under Rule 144A and outside the U.S. in compliance with Regulation S.

How will Uniti secure the new notes?

The New Notes will be secured by first-priority liens on substantially all assets of the Issuers and subsidiary guarantors.