A publicly traded MVPD that announced in early April that it is acquiring Fidelity Communications for $525.9 million in cash through a combination of cash, revolving credit facility capacity and the proceeds of new indebtedness just moved forward on financing the deal by opening a big credit line with J.P. Morgan.
Cable One on Thursday said it has launched the syndication of a new $350 million senior secured revolving credit facility, a new $250 million senior secured term loan A facility, and a new $450 million senior secured delayed draw term loan A facility.
The New Credit Facilities are expected to mature five years after the closing date of the financing, and the Delayed Draw Term Loan A is expected to be available to be drawn at any time during the first nine months following the closing date of the financing.
Cable One intends to apply the proceeds of the New Credit Facilities, together with cash on hand and borrowings under its previously established $325 million senior secured delayed draw term loan “B-3” facility, to refinance its existing senior secured revolving credit facility and senior secured term loan A facility, and to redeem its outstanding 5.75% senior unsecured notes due 2022 on or after June 15, 2019 when the call premium steps down.
Most importantly, Cable One confirmed that the funds it can tap into will be used to finance its pending buy of Fidelity’s data, video and voice business and certain related assets.
The effectiveness of the New Credit Facilities and the terms thereof, including principal amounts and interest rates, are subject to market conditions and other factors outside of Cable One’s control, it said.
Cable One expects to realize $15 million in estimated annual run-rate cost synergies within three years of closing the Fidelity transaction, expected in Q4 2019.