Consolidated Communications announced the closing of its inaugural fiber securitization transaction consisting of asset-backed term notes totaling $1.344 billion, secured by all existing and future fiber-enabled customers across certain states and the fiber optic and network infrastructure to support these customers.
Along with the offering of the notes, the company also entered into a commitment for a $500 million variable funding note facility, subject to leverage tests and other customary drawing conditions. Plus, an affiliate of the Company entered into a $1.5 billion secured, revolving warehouse facility, subject to leverage tests and other customary drawing conditions.
The notes were issued in three classes consisting of $1.001 billion 6.0% Series 2025-1, Class A-2 notes, $152.8 million 6.5% Series 2025-1, Class B notes, and $189.7 million 9.4% Series 2025-1, Class C notes, each with an anticipated repayment date of May 2030. And the notes have a weighted average coupon of about 6.5%.
The proceeds of the deal will be used to, among other things, repay existing indebtedness, and for general corporate purposes, including the Company’s growth initiatives and expansion of its fiber network.
Advisors/Bookrunners/Counsel: Morgan Stanley acted as sole structuring agent and lead left active bookrunner. And Goldman Sachs, Guggenheim Securities, Jefferies, J.P. Morgan Securities, RBC Capital Markets, Santander US Capital Markets, UBS Securities, and Wells Fargo Securities acted as active bookrunners. Paul, Weiss, Rifkind, Wharton & Garrison served as counsel to Consolidated, and King & Spalding served as counsel to the initial purchasers in the offering.
KEY QUOTES:
“We are pleased to complete our inaugural asset backed securitization, which reflects the strong value of our fiber infrastructure and growing penetration across our footprint. With favorable, long-term financing in place, we’ll continue to disrupt the market with our best-in-class fiber product, Fidium, while continuing to expand our fiber network.”
Fred Graffam, chief financial officer at Consolidated
“I am more confident than ever in our future as a fiber-first Company. Having completed our go-private with Searchlight Capital Partners and British Columbia Investment Management Corporation at the end of 2024 and through this financing, we have solidified the future growth of Fidium and remain focused on unlocking new opportunities, fueling innovation, and empowering our teams to deliver on our vision to become America’s favorite fiber provider.”
Bob Udell, chief executive officer at Consolidated
