WALL, N.J.-Centennial Communications Corp. said it completed an offering of $550 million in senior notes due to mature in 2013.
Centennial said it plans to use the net proceeds from the offering and a portion of its cash on hand to pay out a special cash dividend of $5.52 per share to its common stockholders and to prepay about $39.5 million in loans under its senior secured credit facility. The dividend was approved by the company’s board of directors and the payment date is slated for Jan. 5. The company expects that no more than 10 percent of the special payment will be taxable as a dividend, and the remainder will be treated as a tax-free return of capital up to each stockholder’s tax basis in common stock, with excess dealt with as capital gain.
The senior notes were issued in two series. One portion of the notes, about $350 million, are floating rate notes that bear interest at three-month London Interbank Offer Rate (LIBOR) plus 5.75 percent; the other $200 million were fixed rate notes that bear interest at 10 percent.
Centennial’s stock was trading down 25 cents early Thursday at $15.64 per share.
