Cogent talks $450 million five-year notes to yield 7%-7¼%; books close Tuesday afternoon

By Paul A. Harris

Portland, Ore., June 7 – Cogent Communications Group, Inc. talked its $450 million offering of senior notes due 2027 (B3/B) to yield 7% to 7¼%, according to market sources.

Official talk comes tight to initial guidance in the low-to-mid 7% area.

The order book is heard to be two-times oversubscribed, a sellside source said.

Books close at 1:15 p.m. ET on Tuesday.

BofA Securities Inc. is the left bookrunner. J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. are the joint bookrunners.

The Rule 144A and Regulation S for life five-year notes become callable after two years at par plus 50% of the coupon. They feature a 40% equity clawback at par plus the full coupon during the non-call period. They also feature a 101 poison put.

Proceeds will be used to redeem and retire the Cogent Communications Group 4 3/8% senior notes due 2024, with any remaining proceeds to be used for general corporate purposes and/or to make special or recurring dividends.

Cogent Communications Group, a wholly owned subsidiary of Cogent Communications Holdings Inc., is a Washington, D.C.-based internet services provider.

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