WOW! Closes on $200 Million New Senior Term Loan

Rhea-AI Summary

WOW! Internet, TV & Phone (NYSE: WOW) has announced that its subsidiary, WideOpenWest Finance, , has closed on a new $200 million super-priority Senior Term Loan with existing lenders. The loan will mature in December 2028 and bear interest at SOFR plus 7.00%, taking priority over WOW!'s existing credit facility. Existing term loan lenders funding their pro rata share can exchange commitments into the super-priority agreement at various rates.

CEO Teresa Elder stated that this additional liquidity strengthens WOW!'s position to re-accelerate its fiber Greenfield strategy, aiming to pass 400,000 homes with their high-speed fiber network over the next few years. The company has been expanding its network to new communities since 2022.

Positive

• Secured $200 million in new senior term loan financing
• Additional liquidity to support fiber network expansion strategy
• Aiming to pass 400,000 homes with high-speed fiber network

Negative

• New loan bears a relatively high interest rate of SOFR plus 7.00%
• Potential dilution of existing credit facility priority

Insights

Financial Analyst

WOW!'s new $200 million super-priority Senior Term Loan is a significant financial development. This additional liquidity strengthens the company's balance sheet and provides capital for its fiber Greenfield strategy. The loan's 7.00% interest rate above SOFR is relatively high, reflecting some risk, but the December 2028 maturity offers long-term stability. The priority structure over existing credit facilities may concern other creditors. The option for existing lenders to exchange their commitments into this new agreement at various rates is an interesting feature, potentially reducing overall debt costs. This move signals confidence in WOW!'s expansion plans, particularly its goal to pass 400,000 homes with its fiber network. However, investors should monitor how effectively the company deploys this capital and whether the high-interest burden impacts profitability.

Telecom Industry Expert

WOW!'s focus on expanding its fiber network through the Greenfield strategy is a smart move in the competitive broadband market. Fiber-optic internet offers superior speeds and reliability compared to traditional cable, positioning WOW! to capture market share in new communities. The goal of passing 400,000 homes is ambitious but achievable with this new funding. The telecom industry is capital-intensive and this loan provides necessary resources for infrastructure development. However, success will depend on execution, including efficient network deployment and effective marketing to achieve high take-rates in new areas. The company's ability to differentiate its services and pricing in a crowded market will be crucial. Investors should watch for subscriber growth metrics and average revenue per user (ARPU) in upcoming quarters to gauge the success of this expansion strategy.

ENGLEWOOD, Colo., Oct. 15, 2024 /PRNewswire/ -- WOW! Internet, TV & Phone (NYSE: WOW), a leading broadband services provider, today announced WideOpenWest Finance, LLC, a subsidiary of WOW!, has closed on a new super-priority credit agreement consisting of a new Senior Term Loan in an aggregate principal amount of $200 million, with a group of existing lenders. The super-priority credit agreement will mature in December 2028 and bear interest at a rate equal to SOFR plus 7.00% and have priority over WOW!'s existing credit facility.

The credit agreement further provides that term loan lenders under the existing credit facility that fund their pro rata share of the Senior Term Loan, will be entitled to exchange their existing term loan commitments under the existing credit agreement into the super-priority credit agreement at various interest rates.

"Today's announcement of additional liquidity puts WOW! in a strong position to re-accelerate our fiber Greenfield strategy," said Teresa Elder, WOW! CEO. "Since 2022, we have successfully brought our high-speed fiber network to a number of new communities as we continue to work toward our goal of 400,000 homes passed over the next few years."

Honigman LLP and Wachtell, Lipton, Rosen & Katz served as legal counsel, and PJT Partners served as financial advisor to WOW!, in connection with this transaction. 

FTI served as financial advisor and Gibson, Dunn & Crutcher LLP served as legal counsel to an ad hoc group of the term lenders.

About WOW! Internet, TV & Phone
WOW! is one of the nation's leading broadband providers, with an efficient and high-performing network that passes nearly 2 million residential, business and wholesale consumers. WOW! provides services in 16 markets, primarily in the Midwest and Southeast, including Michigan, Alabama, Tennessee, South Carolina, Georgia and Florida, including the new all-fiber networks in Central Florida and Greenville County, South Carolina. With an expansive portfolio of advanced services, including high-speed Internet services, cable TV, home phone, mobile phone, business data, voice, and cloud services, the company is dedicated to providing outstanding service at affordable prices. WOW! also serves as a leader in exceptional human resources practices, having been recognized 11 times by the National Association for Business Resources as a Best & Brightest Company to Work For in the Nation, winning the award for the last seven consecutive years and making the 2022 Top 101 National Winners list. Visit wowway.com for more information.

Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release that are not historical facts contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as "may," "intend," "might," "will," "should," "could," "would," "anticipate," "expect," "believe," "estimate," "plan," "project," "predict," "potential," or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control that could cause our actual results to differ materially from those in the forward-looking statements. These factors and other risks that could cause our actual results to differ materially are set forth in the section entitled "Risk Factors" in our Annual Report filed on Form 10-K with the Securities and Exchange Commission ("SEC") and other reports subsequently filed with the SEC and also include the following factors: our ability to execute our Greenfield strategy and maintain compliance with the covenants in our Senior Term Loan. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this presentation are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.

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SOURCE WideOpenWest, Inc.

FAQ

What is the size and terms of WOW!'s new senior term loan?

WOW! (NYSE: WOW) has closed on a $200 million super-priority Senior Term Loan, maturing in December 2028 with an interest rate of SOFR plus 7.00%.

How will WOW! use the proceeds from the new $200 million loan?

WOW! plans to use the additional liquidity to re-accelerate its fiber Greenfield strategy, expanding its high-speed fiber network to new communities.

What is WOW!'s target for fiber network expansion?

WOW! (NYSE: WOW) aims to pass 400,000 homes with its high-speed fiber network over the next few years as part of its expansion strategy.

How does the new loan affect WOW!'s existing credit facility?

The new $200 million super-priority Senior Term Loan will take priority over WOW!'s existing credit facility.