Overbuilders: Rumors Were Wrong


New York-Cable operators, watchful of finance problems at rival overbuilders, were talking last week about reports that two of the sector's top players were having problems with major debt deals.

According to the scuttlebutt that swept through one of the annual post-Kaitz Foundation dinner parties, a group of banks set to do a $250-million debt offering for Knology Inc. suddenly canceled a syndication meeting for the debt placement when they couldn't find any buyers. Rumor had it the bankers were looking for significant concessions from Knology, including reducing the size of the placement, increasing the pricing, or including stock warrants in the deal.

Problems with that deal were rumored to have put an even bigger deal-Western Integrated Networks LLC's $400 to $500 million placement with Merrill Lynch & Co. Inc. and Bear Stearns & Co. Inc.-on hold.

But according to Knology chief financial officer Rob Mills, the gossips had their wires crossed. Knology has not yet scheduled a syndication meeting for its debt placement. But it did cancel a planned Sept. 11 educational meeting for bankers.

He stressed that Knology's planned debt placement for "not quite" $250 million is expected to take place sometime before the end of November.

WIN chief financial officer Jake Kane said his company's debt offerings are on track to begin around the same time.

"The reception is better than it has ever been," Kane said. "The future looks pretty bright."

Mills admitted there is some "uncertainty" in the overbuilder market, but said no one is pulling out of commitments just yet.

"The banks understand our business plan," Mills said.