Cogent Communications increases leverage to fund shareholder returns

By Lisa Kerner

Charlotte, N.C., June 4 – Cogent Communications Holdings, Inc. expects to grow its top line by 10% to 20% annually, according to chief executive officer Dave Schaeffer.

Schaeffer made his comments on Thursday during the Morgan Stanley Leveraged Finance Conference in New Orleans.

The company has generated positive free cash flow from operations for the last nine years and bought back about 20% of its float, said Schaeffer.

Cogent returns about 8% of its free cash to equity holders per year, which is in excess of free cash flow, and takes on additional leverage.

“The company has two tranches of debt outstanding: a (5 3/8%) senior secured and a (5 5/8%) senior unsecured note,” said Schaeffer.

The notes are noncallable and have about seven years left in duration.

Cogent ended the last quarter with $290 million of cash on the balance sheet and net leverage of about 2.45%, according to the CEO.

Washington, D.C.-based Cogent is an internet backbone network services provider.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.