In exchange for refinancing its existing senior debt, NTelos Holdings Corp., a telecom company backed by
The provider of wireless and wireline communication services in Virginia and West Virginia has begun arranging a new $635 million first lien term loan along with a $35 million revolving credit facility. It’s expecting to close on the new debt package in mid-August.
Proceeds of the new term loan will go toward refinancing and extending the maturity of its outstanding $603 million first lien term loan, which matures in August 2011 and has four required quarterly debt repayments of approximately $149 million each commencing on Dec. 31, 2010.
In concert with its goal of raising the new debt capital, Waynesboro, Va.-based NTelos issued a preliminary financial statement, saying its estimated consolidated revenues would be roughly $140 million for the second quarter, slightly higher than the $131 million it generated in the second quarter of 2008, and on par with its performance in the first quarter of 2009. Consolidated adjusted EBITDA is expected to be approximately $60 million for second quarter of 2009, up slightly from $57.8 million during the same period in 2008.
Meanwhile, total churn, which is a measure of customer attrition, was 3 percent for NTelo’s wireless monthly subscriber base for the three months ended June 30, 2009, slightly lower than 3.1 percent in the first quarter, the company said.
“Wireless churn improved sequentially from the previous quarter, though it remained at levels higher than the previous year, reflecting continuing difficult economic conditions,” James Quarforth, chief executive officer of NTelos, said in a statement.
Looking ahead, the company reaffirmed its performance expectations for the full year, including consolidated revenues ranging between $562 million and $571 million; consolidated adjusted EBITDA ranging between $230 million and $236 million; and capital expenditures ranging between $109 million and $115 million.
Quadrangle Group originally dialed up its investment in NTelos in 2005 via a 50/50 joint venture with Citigroup Venture Capital, now known as
Financing for that original deal, which worked out to a multiple just north of 6x NTelos’ 2004 EBITDA of $120 million, included a $400 million term loan, a $225 million senior secured second-lien term loan and a $35 million revolver led by Morgan Stanley and Bear Stearns.
The two firms made a partial exit from NTelos in February 2006 through a $172.6 million initial public offering priced at $12 a share, below the expected price range of $15 to $17 a share. Then, in September 2007—following an earlier secondary stock offering that netted $200.75 million—Quadrangle Group acquired all the remaining NTelos common stock that was owned by Citigroup Venture Capital, giving it an ownership stake of approximately 27 percent.
While equity for Quadrangle Group’s original purchase of NTelos came from the firm’s $1 billion first fund that was raised in 2000, capital for the follow-on investment came from