Broadwing is working toward an amendment in conjunction with a five-point restructuring plan that will allow the company to deal with its burdensome maturities and amortization. "The most critical issue is getting the bank deal done," said one analyst. The current plan calls for the maturity on the revolver to be extended by 16 months. Pricing on the revolver will be increased to LIBOR plus 4%. Bank of America is the syndication agent on the credit and Citigroup is administration agent. Credit Suisse First Boston and Bank of New York are co-documentation agents.
There will be no change in the maturity date of the "A" term loan. Rather, the piece will be taken out by the end of 2004. This possible amendment is boosting up the market price for the "A" piece, which is quoted in the 95-96 context. This is above the current market for the "B" set at 94-95 1/2 last week. The "A" is a much better piece of paper under the amendment, said one dealer. Pricing on the "A" will be increased to LIBOR plus 33/ 4%.
The company needs to secure the amendment so that it can tap a Goldman Sachs commitment for $350 million of junior debt. Proceeds from this deal have been pegged to pay down bank debt. In addition, it is pursuing a possible sale of its broadband unit. The analyst explained that the company either needs to sell its broadband unit or stop hemorrhaging cash at that level. The voting deadline for the amendment is Feb. 18. Questions for Thomas Schilling, cfo, were referred to a spokesman who did not return calls seeking comment.