UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
|
September
14, 2015
|
Alaska Communications
Systems Group, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
000-28167
|
|
52-2126573
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(I.R.S. Employer
Identification No.)
|
600 Telephone Ave, Anchorage, Alaska
|
|
99503-6091
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Registrant’s telephone number, including area code:
|
(907) 297-3000
|
Not Applicable
|
Former name or former address, if changed since last report
|
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On September 14, 2015, Alaska Communications Systems Holdings, Inc., as
Borrower, Alaska Communications Systems Group, Inc., as Parent
(collectively “Alaska Communications”) and CoBank, ACB, as
administrative agent, entered into a Credit Agreement. The Credit
Agreement provides for a $65 million first lien term loan facility,
together with a $10 million revolving credit facility (collectively, the
“First Lien Facility"). Concurrently, Alaska Communications, as
Borrower, and Crystal Financial, LLC, as administrative agent, entered
into a second lien credit facility (the “Second Lien Facility”) for $25
million (together with the First Lien Facility, the "Credit Facilities").
Alaska Communications used proceeds of the Credit Facilities to pay off
its outstanding $81.5 million term loan and to pay closing costs and
other expenses related to the transaction, with the remaining proceeds
available for certain corporate purposes. Pricing on the First Lien
Facility is set at LIBOR plus 4.5 percent with a LIBOR minimum of 1.0
percent. Draws on the revolving credit facility would be at LIBOR plus
4.5 percent with a LIBOR minimum of 1.0 percent and a commitment fee of
0.25 percent per annum on the average daily unused portion. Pricing on
the Second Lien Facility is set at LIBOR plus 8.5 percent with a LIBOR
minimum of 1.0 percent. At current LIBOR rates, the weighted interest
cost of the Credit Facilities is 6.61%, which is similar to the previous
term loan facility.
The First Lien Facility requires quarterly prepayments of
|
(i)
|
$250,000 in 2015 (commencing with the end of the fourth fiscal
quarter); and
|
|
(ii)
|
$750,000 in each quarter of 2016
|
Each year thereafter, the quarterly prepayment amount increases by
$250,000 until maturity.
The Credit Facilities are structured so the Second Lien Facility can be
paid off prior to its maturity, leaving the First Lien Facility
remaining.
The Credit Facilities mature in the first quarter of 2018, but will be
extended if Alaska Communications:
|
(a)
|
has refinanced or repurchased its existing 6.25% convertible notes
due May, 2018, such that no more than $30,000,000 of principal
amount of the notes are outstanding (with cash available for their
payment at maturity) and any replacement notes have a maturity date
on or after January 1, 2021,
|
|
|
|
|
(b)
|
has achieved certain liquidity requirements, and
|
|
|
|
|
(c)
|
is otherwise compliant with the terms of the Credit Facilities.
|
The obligations of Alaska Communications will be secured by perfected
first and second lien priority security interests in substantially all
of its and its direct and indirect subsidiary’s tangible and intangible
assets (including, without limitation, intellectual property, real
property and all of the capital stock of the Borrower and each of the
Parent’s direct and indirect subsidiaries), subject to certain agreed
exceptions.
The Credit Facilities contain customary representations, warranties and
covenants. In addition, the Credit Facilities contain financial
covenants that: (i) impose maximum net total leverage and senior
leverage to annual EBITDA ratios, and (ii) require a minimum annual
EBITDA to debt service coverage obligations ratio.
The Credit Facilities provide for events of default customary for credit
facilities of this type, including non-payment, defaults on other debt,
misrepresentation, breach of covenants, representations and warranties,
and insolvency and bankruptcy. After the occurrence of an event of
default and for so long as it continues, the Administrative Agent upon
request of the Required Lenders (as defined in the Credit Facilities)
may increase the interest rate then in effect on all outstanding
obligations by 2.0%. Upon an event of default relating to insolvency,
bankruptcy or receivership, the amounts outstanding under the Credit
Facilities will become immediately due and payable. Upon the occurrence
and continuation of any other event of default, the Administrative Agent
upon request of the Required Lenders may accelerate payment of all
obligations.
On September 15, 2015, the Company issued a press release announcing
that it had entered into the Credit Facilities. A copy of the press
release is furnished herewith as Exhibit 99.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 regarding the Company’s entry
into, and borrowings under, the Credit Facilities is incorporated herein
by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
Alaska Communications Systems Group, Inc.
|
|
|
|
September 15, 2015
|
By:
|
/s/ Leonard A. Steinberg
|
|
|
|
|
|
Name: Leonard A. Steinberg
|
|
|
Title: Corporate Secretary
|
Exhibit Index
Exhibit No.
|
|
Description
|
|
|
|
99.1
|
|
Press Release of the Company, dated September 15, 2015.
|
Exhibit 99.1
Alaska
Communications Closes New $100 Million Senior Credit Facility
ANCHORAGE, Alaska--(BUSINESS WIRE)--September 15, 2015--Alaska
Communications (NASDAQ:ALSK) closed the refinancing of its existing
senior term loan on Sept. 14, 2015.
Alaska Communications entered into $100 million of senior secured
financing, including a $10 million revolving loan. Alaska Communications
used proceeds to pay off its outstanding $80 million term loan, fund
fees and expenses associated with the refinancing, and for corporate
purposes.
“We have taken full advantage of a suitable financing window in the
credit markets. The cost of the facility is similar to our current
facility, which was scheduled to mature next year. With this financing,
we now have no debt maturing sooner than 2018. We are also pleased to be
working with a group of lenders who can support our business over the
long term,” Alaska Communications CFO Wayne Graham said.
CoBank and ING Capital LLC served as the lead arrangers on the financing.
About Alaska Communications
Alaska Communications (NASDAQ:ALSK) is the leading provider of advanced
broadband and IT managed services for businesses and consumers in
Alaska. The company operates a highly reliable, advanced statewide data
network with the latest technology and the most diverse undersea fiber
optic system connecting Alaska to the contiguous U.S. For more
information, visit www.alaskacommunications.com or www.alsk.com.
CONTACT:
Alaska Communications
Media:
Hannah Blankenship,
907-564-1326
Hannah.Blankenship@acsalaska.com
or
Investors:
Tiffany
Dunn, 907-564-7556
investors@acsalaska.com
Alaska Communications Sy... (NASDAQ:ALSK)
Historical Stock Chart
From Apr 2024 to May 2024
Alaska Communications Sy... (NASDAQ:ALSK)
Historical Stock Chart
From May 2023 to May 2024