WideOpenWest is taking out a $100 million debt financed dividend for its shareholders, including Oak Hill Partners and ABRY Partners. The money will come from an increase in its term loan "B" following an amendment to its senior secured facility. Steven Cochran, cfo, said good market conditions led to the decision to take the equity dividend.
GE Capital is leading the deal and Société Générale and Harris Nesbit are the co-syndication agents. The loan for the internet and cable company had consisted of a $30 million revolver due 2010, an $80 million term loan due 2010 and a $170 million term loan "B" due 2011. After amortization, the term loan had been decreased to $79 million and the term loan "B" to $168 million. With the amendment, the term loan "B" will increase to $268 million. Pricing for the revolver and term loan is LIBOR plus 3 1/2% based on a grid. Pricing on the term loan "B" is at LIBOR plus 3%, down from LIBOR plus 4 1/2%.
Moody's Investors Service affirmed its rating of B2 on the bank debt. Absent the pro forma increase in leverage, Moody's would have considered revising the ratings upwards based on declining leverage and continued strong operating trends. Instead, leverage will rise to above five times on a pro forma basis. Leverage is expected to approach the low four-times range as 2005 progresses.