WALL, N.J.-Centennial Communications Corp. said it has received a commitment for a new $750 million senior secured credit facility, consisting of a $600 million seven-year term loan maturing in 2011 and a $150 million six-year revolving credit facility maturing in 2010. In addition, Centennial said it intended to sell approximately $250 million in aggregate principal amount of senior notes due 2014 in a private placement.
The telecommunications provider said it plans to use proceeds from both the credit facility and notes offering to refinance and replace its existing secured credit facilities that had an outstanding balance of $628 million as of Nov. 30, 2003; fund the repurchase of all of the company’s outstanding unsecured subordinated notes due 2009 valued at approximately $194 million; and pay related fees and expenses.
Following the funding announcement, Moody’s Investor Services assigned a Caa1 rating to the senior notes offering, a B2 rating to the new credit facility, downgraded Centennial’s 10.75-percent senior subordinated notes due 2009 from Caa2 to Caa3 and confirmed the Caa1 rating on the company’s 10.125-percent senior notes due 2013. In addition, Moody’s changed its ratings outlook for Centennial from positive to stable, noting that while the company does generate “meaningful amounts of free cash flow, such amounts are expected to be modest relative to the company’s debt burden.”
