| Item 1.01 |
Entry into a Material Definitive Agreement. |
On February 14, 2023, Uniti Group LP, Uniti Group Finance 2019 Inc.,
Uniti Fiber Holdings Inc. and CSL Capital, LLC (together, the “Issuers”), each a subsidiary of Uniti Group Inc. (the “Company”
and, together with the Issuers, “us” or “we”), completed a private offering of $2,600,000,000 aggregate principal
amount of the Issuers’ 10.50% Senior Secured Notes due 2028 (the “Notes”). The Issuers used the net proceeds from the
offering to fund the redemption in full of the Issuers’ outstanding 7.875% Senior Secured Notes due 2025 (the “2025 Secured
Notes”), to repay outstanding borrowings under the Company’s revolving credit facility and to pay any related premiums, fees
and expenses in connection with the foregoing. On February 14, 2023, the Issuers deposited the full redemption price for the 2025 Secured
Notes with the Trustee (as defined below) and satisfied and discharged their respective obligations with respect to the Indenture (as
defined below) at such time.
The Notes were issued at an issue price of 100% of their principal
amount pursuant to an Indenture, dated as of February 14, 2023 (the “Indenture”), among the Issuers, the guarantors named
therein (collectively, the “Guarantors”) and Deutsche Bank Trust Company Americas, as trustee (in such capacity, the “Trustee”)
and as collateral agent. The Notes mature on February 15, 2028 and bear interest at a rate of 10.50% per year. Interest on the Notes is
payable on March 15 and September 15 of each year, beginning on September 15, 2023.
The Issuers may redeem the Notes, in whole or in part, at any time
prior to September 15, 2025 at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid
interest on the Notes, if any, to, but not including, the redemption date, plus an applicable “make whole” premium described
in the Indenture. Thereafter, the Issuers may redeem the Notes in whole or in part, at the redemption prices set forth in the Indenture.
In addition, prior to February 15, 2025, the Issuers may, on one or more occasions, redeem up to 10% of the aggregate principal amount
of the Notes in any twelve month period at a redemption price equal to 103% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to, but not including, the applicable redemption date. Notwithstanding the foregoing, the Issuers may not use the proceeds
of any offering of Additional Notes (as defined in the Indenture) with a price to investors equal to or in excess of 103% to finance any
such optional redemption. Further, at any time on or prior to September 15, 2025, up to 40% of the aggregate principal amount of the Notes
may be redeemed with the net cash proceeds of certain equity offerings at a redemption price of 110.50% of the principal amount plus accrued
and unpaid interest, if any, to, but not including, the applicable redemption date; provided that at least 60% of aggregate principal
amount of the originally issued Notes remains outstanding. If certain changes of control of Uniti Group LP occur, holders of the Notes
will have the right to require the Issuers to offer to repurchase their Notes at 101% of their principal amount plus accrued and unpaid
interest, if any, to, but not including, the repurchase date.
The Notes are fully and unconditionally guaranteed, jointly and severally,
on a senior unsecured basis by the Company and on a senior secured basis by each of Uniti Group LP’s existing and future domestic
restricted subsidiaries (other than the Issuers) that guarantees indebtedness under the Company’s senior secured credit facilities
and existing secured notes (except initially those subsidiaries that require regulatory approval prior to guaranteeing the Notes) (the
“Subsidiary Guarantors”). In addition, the Issuers will use commercially reasonable efforts to obtain necessary regulatory
approval to allow certain non-guarantor subsidiaries of the Company to guarantee the Notes, including by making filings to obtain such
approval within 60 days of the issuance of the Notes. The guarantees are subject to release under specified circumstances, including certain
circumstances in which such guarantees may be automatically released without the consent of the holders of the Notes.
The Notes and the related guarantees are the Issuers’ and
the Subsidiary Guarantors’ senior secured obligations and rank equal in right of payment with all of the Issuers’ and
the Subsidiary Guarantors’ existing and future unsubordinated obligations; effectively senior to all unsecured indebtedness of
the Issuers and the Subsidiary Guarantors, including the Company’s existing senior unsecured notes, to the extent of the value
of the collateral securing the Notes; effectively equal with all of the Issuers’ and the Subsidiary Guarantors’ existing
and future indebtedness that is secured by first-priority liens on the collateral (including indebtedness under the Company’s
senior secured credit facilities and existing secured notes); senior in right of payment to any of the Issuers’ and Subsidiary
Guarantors’ subordinated indebtedness; and structurally subordinated to all existing and future liabilities (including trade
payables) of the Company’s subsidiaries (other than the Issuers) that do not guarantee the Notes. The guarantee of the Company
will be its senior unsecured obligation and will rank equally in right of payment with all of its existing and future unsubordinated
obligations and senior in right of payment to any of its subordinated indebtedness. The Notes and the related guarantees will also
be effectively subordinated to any existing or future indebtedness that is secured by liens on assets that do not constitute a part
of the collateral securing the Notes to the extent of the value of such assets, and to any existing or future secured indebtedness
of the Company to the extent of the value of the assets securing such indebtedness.
The Notes and the related guarantees will be secured by liens on substantially
all of the assets of the Issuers and the Subsidiary Guarantors, which assets also ratably secure obligations under the Company’s
existing secured notes and senior secured credit facilities, in each case, subject to certain exceptions and permitted liens. The collateral
will not include real property (below a specified threshold of value), but will include certain fixtures and other equipment as well as
cash that we receive pursuant to our long-term exclusive triple-net leases with Windstream Holdings II, LLC.
The Indenture contains customary high yield covenants limiting the
ability of Uniti Group LP and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness;
pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell
assets; transfer material intellectual property to unrestricted subsidiaries; enter into transactions with affiliates; merge or consolidate
or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries
to pay dividends or other amounts to the Issuers. These covenants are subject to a number of important and significant limitations, qualifications
and exceptions. The Indenture also contains customary events of default.
The foregoing description is qualified in its entirety by reference
to the Indenture and the form of Note included therein, which are filed herewith as Exhibits 4.1 and 4.2, respectively, and incorporated
herein by reference.