Consolidated Communications has secured funding for its pending $1.5 billion acquisition of FairPoint Communications.
The service provider had already secured underwritten debt financing for the pending acquisition, that in addition to cash on hand and other sources of liquidity, would be used to repay and redeem certain FairPoint debt and pay fees and expenses associated with both the pending acquisition and related financing.
By securing this new incremental term loan facility, Consolidated will provide an aggregate principal amount of up to $935 million that would be drawn at closing of the pending acquisition.
"Given current capital market conditions as well as the strong receptiveness to the FairPoint acquisition, we were opportunistic on addressing this financing as soon as possible after announcing the acquisition," said Steve Childers, CFO of Consolidated Communications, in a release.
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After it obtains the required regulatory approvals and the approval of both Consolidated Communications' and FairPoint's shareholders, Consolidated expects to close on the FairPoint acquisition by mid-2017.
Consolidated said the terms, conditions and covenants of the new incremental term loan facility are consistent with the company's existing term loan facility and will be treated as a fungible tack on to the existing facility at closing.
Morgan Stanley Senior Funding was left lead arranger and bookrunner. TD Securities (USA) LLC, MUFG and Mizuho Bank LTD were joint lead arrangers and joint bookrunners.