Suddenlink Parent Wraps $600M Debt Offering


Suddenlink's parent said it completed a $600 million debt offering, which was an increase from the initial plan to sell $400 million in notes.

Cequel Communications Holdings I, LLC, and subsidiary co-issuer Cequel Capital said net proceeds, plus cash on hand, were used to repay a portion of loans outstanding under the credit facilities of Cequel Communications (doing business as Suddenlink Communications) and to pay related fees and expenses.

On Oct. 26, when privately held Cequel announced its intent to market this offering, the company sought to issue an aggregate principal amount of $400 million. It was increased to $600 million based on demand for the debt among eligible purchasers.

Cequel's Jerry Kent

The senior notes, bearing an interest rate of 8.625%, were sold at a discount to yield an effective interest rate of 8.875 percent.

"Upsizing this offering to $600 million would be a remarkable achievement under virtually any circumstances, but especially so in the current economic environment," Jerry Kent, Suddenlink's chairman and CEO, said in a release. "I firmly believe that the completed offering and related bank amendment will help us continue our track record of providing a superior level of service to our customers and growing our business."

Since August, cable and satellite-TV operators and programmers have eagerly tapped reopened debt markets, essentially refinancing their debt at attractive interest rates and raising capital that in some cases could fuel acquisitions.

Suddenlink said that on Oct. 22 it received lenders' approval for an amendment to its first lien credit facility. Combined, the amendment and debt offering will facilitate a $233-million capital investment plan through 2012, above and beyond the company's traditional capital spending levels, Suddenlink said.

Suddenlink said the new capital plan is designed to improve the capacity and efficiency of its network and the quantity and quality of the TV, Internet, and phone services it offers.

Suddenlink serves about 1.3 million residential customers and thousands of commercial customers in Arkansas, California, Louisiana, Missouri, North Carolina, Oklahoma, Texas, West Virginia, and elsewhere.

RBC Capital Markets said the transaction was led by Goldman Sachs, Credit Suisse and JP Morgan, with RBC acting as a co-manager, among others.