Alaska Communications strengthens its liquidity and financial flexibility

Alaska Communications (NASDAQ: ALSK) has announced it refinanced its credit agreements, thereby negotiating a reduction in its interest rates, extending the term, increasing capacity for shareholder friendly actions, resetting and widening key covenant thresholds and establishing incremental flexible capacity for success-based capital expenditures, the company said.

Alaska Communications Systems Holdings, Inc., as Borrower, Alaska Communications Systems Group, Inc., as Parent (collectively “Alaska Communications”) and subsidiaries of Alaska Communications, as guarantors, and ING Capital LLC (“ING”), as sole book runner and joint-lead arranger, entered into a new senior credit facility with existing and additional lenders.

A summary of the terms follows:

Established a single Term Loan of USD 180 million with a reduced interest rate of LIBOR + 450 basis points (bps), replacing the previous A1 tranche at LIBOR + 500 bps and the A2 tranche at LIBOR + 700 bps, and extending the term to 2024 from 2022.

Increased the Revolving Credit Facility to USD 20 million at LIBOR + 450 bps from USD 15 million at LIBOR + 500 bps.

Secured a new Delayed Draw Term Loan (“DDTL”) of USD 25 million at LIBOR + 450 bps, which is available for a period of twenty-four months, to be used specifically for success-based capital projects.
At close, net total debt available to the company will be USD 225 million, with USD 180 million drawn.
“In the context of a very volatile and challenging market situation, our ability to secure favorable terms while concurrently increasing our access to capital reflects our credit group´s confidence in the credibility of the company´s business plan, and our ability to execute against that plan.

Alaska Communications will file a Current Report on Form 8-K that describes the transactions in greater detail.