Hawaiian Telcom (Nasdaq: HCOM) has closed the refinancing of its debt, a move that it says will save it $6 million in annual interest costs.
At the same time, the service provider also secured a $300 million term loan in connection with the refinancing.
Earlier this month, Hawaiian Telcom announced it was going to refinance its existing credit facility.
Combined with $16 million of existing cash, Hawaiian Telcom will use the proceeds of the $300 million term loan to pay off its outstanding term loan and pay accrued interest and premium amounts, in addition to closing costs and other expenses.
Eric K. Yeaman, Hawaiian Telcom's president and CEO, said this move "significantly lowers our cost of debt and provides us with improved covenant flexibility."
"The new financing allows HCOM to pay a dividend on its equity," while "the previous debt facility precluded equity dividends," said David Tawil, cofounder and portfolio manager at Maglan Capital, a New York-based debt investment fund.
- see the release
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