Consolidated Communications Announces Consent Solicitation
March 19 2014 - 9:21PM
Consolidated Communications Holdings, Inc. ("Holdings")
(Nasdaq:CNSL), today announced that its subsidiary, Consolidated
Communications, Inc. ("CCI"), has commenced a solicitation of
consents from holders of its 10.875% Senior Notes due 2020 (the
"Senior Notes"). The record date to determine holders eligible to
consent is 5:00 p.m., New York City time, on March 18, 2014.
CCI is soliciting consents from the holders of the Senior
Notes in order to (i) modify CCI's Consolidated Leverage Ratio (as
defined in the Indenture governing the Senior Notes (the
"Indenture")) level required before CCI (subject to certain other
conditions specified in the Indenture) can make Restricted Payments
(as defined in the Indenture) otherwise available under the
consolidated cash flow builder basket from 4.25 to 1.00 to 4.50 to
1.00 and (ii) modify the size of a permitted lien basket for liens
securing Indebtedness (as defined in the Indenture) by amending the
multiplier for CCI's Consolidated Cash Flow in the calculation of
such permitted lien basket from 2.50 to 2.75, in each case under
the Indenture (the "Proposed Amendments"). The Proposed Amendment
with respect to modifying the size of a permitted lien basket for
liens securing Indebtedness would modify such provision in the
Indenture so that it would be the same as the equivalent provision
in the credit agreement governing CCI's existing credit facilities.
Except for the Proposed Amendments, all of the existing terms of
the Indenture and the Senior Notes will remain unchanged. If the
Proposed Amendments are adopted, Holdings and CCI will benefit from
greater financial and operational flexibility and capacity. The
consent solicitation is subject to the terms and conditions set
forth in CCI's Consent Solicitation Statement, dated March 19, 2014
(the "Consent Solicitation Statement").
Holders of the Senior Notes who validly consent to the Proposed
Amendments on or prior to 5:00 p.m., New York City time, on April
1, 2014 (such date and time, as they may be extended, the
"Expiration Time"), will be eligible to receive a consent fee of
$10.00 per $1,000 principal amount of Senior Notes for which
consents are received (and not validly revoked) on or prior to the
Expiration Time. Holders of the Senior Notes may revoke consents in
respect of the Senior Notes at any time prior to the earlier of (i)
5:00 p.m., New York City time, on April 1, 2014, and (ii) the time
at which the Requisite Consents (as defined below) for the Senior
Notes have been received (such time, the "Revocation
Deadline").
CCI's acceptance of validly executed, delivered and unrevoked
consents and payment of the applicable consent fee with respect to
the Senior Notes is conditioned upon, among other things, the
receipt of the Requisite Consents on or prior to the Expiration
Time. If all of the conditions to the consent solicitation
are satisfied or waived, CCI will pay the consent fee to each
holder of Senior Notes who validly consented and did not revoke
their consent on or prior to the Expiration Time.
No consent fee with respect to the Senior Notes will be paid if
the Requisite Consents are not received prior to the Expiration
Time or if the consent solicitation is terminated for any reason.
CCI reserves the right to terminate, withdraw or amend the
consent solicitation at any time and from time to time, as
described in the Consent Solicitation Statement.
Upon receipt of consents from holders of at least a majority in
aggregate principal amount of the outstanding Senior Notes on or
prior to the Expiration Time, excluding any Senior Notes owned by
CCI or any of its affiliates (the "Requisite Consents"), CCI and
the trustee under the indenture governing the Senior Notes will
execute a third supplemental indenture giving effect to the
Proposed Amendments. Except in certain limited circumstances,
consents delivered pursuant to the consent solicitation may not be
withdrawn or revoked after the Revocation Deadline.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any notes or any other securities
of CCI, nor shall there be any offer, solicitation or sale of the
notes in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful. The consent
solicitation is being made solely pursuant to the Consent
Solicitation Statement and related materials, copies of which will
be delivered to all holders of Senior Notes. The consent
solicitation is not being made to, and consents will not be
accepted from or on behalf of, holders in any jurisdiction in which
the making of the consent solicitation or the acceptance thereof
would not be in compliance with the laws of such jurisdiction.
Holders are urged to read the Consent Solicitation Statement
carefully. Persons with questions regarding the consent
solicitations should contact the solicitation agent, Morgan
Stanley, at (212) 761 – 1057 or toll-free at 1 (800) 624 – 1808.
Requests for copies of the Consent Solicitation Statement and
the related Consent Letter should be directed to the Tabulation and
Information Agent, Global Bondholder Services, at (212) 430 – 3774
or toll-free at 1 (866) 804 – 2200.
About Consolidated
Consolidated Communications Holdings, Inc. (together with its
subsidiaries, the "Company") is a leading communications provider
within its six state operations of California, Illinois, Kansas,
Missouri, Pennsylvania and Texas. Headquartered in Mattoon, IL, the
Company has been providing services in many of its markets for over
a century. With one of the highest quality networks in the
industry, the Company offers a wide range of communications
services, including IP-based digital and high definition
television, high speed internet, voice over IP, carrier access,
directory publishing and local and long distance service.
Safe Harbor
Any statements in this news release other than statements of
historical facts, including statements about management's beliefs
and expectations, are forward-looking statements and should be
evaluated as such. These statements are made on the basis of
management's views and assumptions regarding future events and
business performance. Words such as "estimate," "believe,"
"anticipate," "expect," "intend," "plan, "target," "project,"
"should," "may," "will" and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
(including oral representations) involve risks and uncertainties
that may cause actual results to differ materially from any future
results, performance or achievements expressed or implied by such
statements. These risks and uncertainties include the ability of
the Company to successfully integrate the operations of SureWest
Communications and realize the synergies from the acquisition, as
well as a number of other factors related to the businesses of the
Company, including various risks to stockholders of not receiving
dividends and risks to the Company's ability to pursue growth
opportunities if the Company continues to pay dividends according
to the current dividend policy; various risks to the price and
volatility of the Company's common stock; the substantial amount of
debt and the Company's ability to repay or refinance it or incur
additional debt in the future; the Company's need for a significant
amount of cash to service and repay the debt and to pay dividends
on the Company's common stock; changes in the valuation of pension
plan assets; restrictions contained in the Company's 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; changes in content
costs, which have been substantial and continue to increase; risks
associated with the Company's possible pursuit of acquisitions;
economic conditions in the Company's service areas; system
failures; 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; telecommunications carriers disputing
and/or avoiding their obligations to pay network access charges for
use of the Company's network; high costs of regulatory compliance;
the competitive impact of legislation and regulatory changes on the
telecommunications industry; and liability and compliance costs
regarding environmental regulations. These and other risks and
uncertainties are discussed in more detail in the Company's filings
with the U.S. Securities and Exchange Commission (the "SEC"),
including our reports on Form 10-K and Form 10-Q.
Many of these risks are beyond management's ability to control
or predict. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the cautionary statements and risk factors
contained in this communication and the Company's filings with the
SEC. Because of these risks, uncertainties and assumptions,
you should not place undue reliance on these forward-looking
statements. 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 do not
undertake any obligation to update or review any forward-looking
information, whether as a result of new information, future events
or otherwise.
CONTACT: Company Contact:
Matt Smith
VP of Finance & Treasurer
217-258-2959
matthew.smith@consolidated.com
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