HickoryTech gets $135.3 million term loan, $30 million revolver

By Angela McDaniels

Tacoma, Wash., Oct. 30 - HickoryTech Corp., which does business as Enventis, amended its credit agreement on Wednesday to provide for a $135.3 million secured term loan B and a $30 million secured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The initial interest rate is Libor plus 275 basis points. There is no Libor floor. The initial commitment fee is 37.5 bps.

The margin over Libor ranges from 225 bps to 300 bps, and the commitment fee ranges from 25 bps to 37.5 bps. Both depend on the company's leverage.

Both the term loan B and revolver mature Dec. 31, 2019.

CoBank ACB is the administrative agent, lead arranger and bookrunner. Union Bank, NA and Sun Trust Bank, NA are the co-syndication agents. Associated Bank, NA and four Farm Credit System institutions are also lenders.

The company must make quarterly amortization payments of $338,000 on the term loan B.

No borrowings were outstanding under the revolver on Wednesday.

The credit agreement includes new allowances for continued payment of HickoryTech dividends and common stock repurchases. The agreement also has been designed to provide incremental financing for business acquisitions that fit the company's growth plans.

The credit facility is secured by substantially all HickoryTech assets. It includes financial covenants that require HickoryTech to maintain a leverage ratio of less than 3.5 to 1.0, which declines to 3.25 to 1.00 in 2015 and to 3.0 to 1.0 in 2016, and a debt service coverage ratio of greater than 2.5 to 1.0.

The new debt replaces the company's existing debt and provides "additional capacity and flexibility to allow us to continue our growth strategy over the next several years," David Christensen, senior vice president and chief financial officer, said in a company news release.

The company's leverage ratio is about 2.9 times, according to Christensen.

HickoryTech is a business and broadband communications provider based in Mankato, Minn.

© 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.