UScellular announces redemption of 7.25% Senior Notes due 2063

Rhea-AI Summary

United States Cellular Corporation (NYSE: USM) will redeem all outstanding 7.25% Senior Notes due 2063 (NYSE: UZB) on May 12, 2021, totaling $275 million. Redemption will occur at 100% of the principal plus accrued interest. The company's CFO, Peter L. Sereda, emphasized that lowering balance sheet costs is a priority, enabling investments in opportunities like 5G. A notice of redemption is being sent to registered holders, with inquiries directed to respective brokerages.

Positive

• Redemption of $275 million in Senior Notes lowers debt costs.
• Focus on optimizing financial leverage to invest in 5G opportunities.

Negative

• None.

CHICAGO, April 12, 2021 /PRNewswire/ -- United States Cellular Corporation (NYSE: USM) today announced that it will redeem all of its outstanding 7.25 percent Senior Notes due 2063 (NYSE: UZB). The $275 million aggregate principal amount of outstanding notes will be redeemed May 12, 2021, at a redemption price of 100 percent of the principal amount ($25 face value per unit), together with accrued and unpaid interest to the redemption date. The paying agent is The Bank of New York Mellon Trust Company, N.A., c/o The Bank of New York Mellon, 111 Sanders Creek Parkway, East Syracuse, New York 13057, Attn:  Bond Redemption Unit.

"Lowering the cost of our balance sheet is a top Treasury priority for UScellular this year, as we work to optimize our financial leverage to enable our business to continue investing in attractive opportunities such as 5G," said Peter L. Sereda, TDS executive vice president and chief financial officer. "Redemption of these notes is a productive first step and we will evaluate other options to take advantage of the low interest rate environment."

A notice of redemption with instructions is being distributed to registered holders of the notes. Beneficial holders with any questions about the redemption should contact their respective brokerage firm or financial institution that holds notes on their behalf.

About UScellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to customers with 5.0 million connections in 21 states. The Chicago-based company had 5,300 full- and part-time associates as of December 31, 2020. At the end of the fourth quarter of 2020, Telephone and Data Systems, Inc. owned 82 percent of UScellular. For more information about UScellular, visit uscellular.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; UScellular's smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of UScellular's businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties; uncertainties in UScellular's future cash flows and liquidity and access to the capital markets; the ability to make payments on UScellular indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; potential conflicts of interests between TDS and UScellular; cyber-attacks or other breaches of network or information technology security; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; the impact, duration and severity of public health emergencies, such as the COVID-19 pandemic. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of UScellular's Form 10-K.

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SOURCE United States Cellular Corporation

FAQ

When will UScellular redeem its Senior Notes due 2063?

UScellular will redeem its Senior Notes on May 12, 2021.

What is the aggregate principal amount of the Senior Notes being redeemed by UScellular?

The aggregate principal amount being redeemed is $275 million.

What is the redemption price for the UScellular Senior Notes due 2063?

The redemption price is 100% of the principal amount plus accrued interest.

Who is the paying agent for the UScellular Senior Notes redemption?

The paying agent is The Bank of New York Mellon Trust Company, N.A.

What does UScellular aim to achieve by redeeming the Senior Notes?

UScellular aims to lower its balance sheet costs and enhance financial leverage for future investments.