RCN plans $885 million in credit facilities for buyout by ABRY

By Sara Rosenberg

New York, March 5 - RCN Corp. plans to get $885 million in new credit facilities to help fund its acquisition by ABRY Partners, according to a market source.

SunTrust, GE Capital and Société Générale are the bookrunners on the deal, with SunTrust the left lead and the administrative agent.

The facilities are split into two transactions - one for RCN's cable business and one for its fiber business.

The RCN cable credit facility is sized at $620 million, consisting of a $40 million five-year revolver and a $580 million six-year term loan, the source said. Expected ratings on this facility are high single-Bs.

And, the RCN fiber credit facility is sized at $265 million, consisting of a $25 million five-year revolver and a $240 million six-year term loan, the source continued. Expected ratings on this facility are mid single-Bs.

Timing for the bank meeting has not yet been determined; however, it is expected that it may coincide with roughly the end of the 40-day go-shop period (April 14) that RCN is entitled to under the buyout agreement.

The RCN purchase is valued at $1.2 billion, including the assumption of debt. RCN stockholders will be receiving $15 per share.

Other financing for the transaction will come from equity.

Closing on the buyout is expected in the second half of this year, subject to receipt of stockholder approval, regulatory approvals and satisfaction of other customary conditions. The transaction is not subject to any financing condition.

RCN is a Herndon, Va.-based broadband services provider.

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