Hawaiian Telcom refinances its existing credit facility

Hawaiian Telcom (Nasdaq: HCOM) wants to refinance its existing $300 million debt, a move that could ultimately save the ILEC $5 million per annum or roughly 45 cents per share.

Eric K. Yeaman, Hawaiian Telcom's president and CEO, said in a statement that they believe this is the right time to refinance.

"The credit markets appear to have improved and we believe conditions now are favorable for us to pursue refinancing of our existing credit facility under improved terms," he said.

Yeaman added that "we believe our unaudited 2011 fourth quarter results support seeking a refinancing at this time" and "Our preliminary unaudited fourth quarter results are in line with our expectations, showing revenue improvement over the prior quarter as well as margin improvement."

David Tawil, cofounder and portfolio manager at Maglan Capital, a New York-based debt investment fund, agrees that the telco's move will help it lower its interest expense.  

"At the very least it brings down the interest expense, and it's good that the company stated that its top-line is up and that margins are continuing to improve," he said.

As Hawaiian Telcom continues to follow the industry-wide trend of losing traditional voice connections, their ongoing roll out of IPTV could give it another revenue opportunity.

"The video business should really begin to take off and add some major profitability," Tawil said.

The service provider will report its full-year 2011 and Q4 2011 financial results on or around March 15.

For more:
- see the release

Special report: Wireline in the fourth quarter 2011

Related articles:
Hawaiian Telcom's reorganization plan gets PUC approval
Hawaiian Telcom begins trading on NASDAQ
Hawaiian Telcom lays out new union employment terms, but expects legal challenge
Hawaiian Telcom stays mum about its IPTV strategy

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