CHICAGO, May 3, 2024
/PRNewswire/ -- Telephone and Data Systems, Inc. (NYSE: "TDS")
announced today the closing of a $375
million unsecured debt financing with funds managed by
Oaktree Capital Management, L.P. ("Oaktree"). The proceeds
will be used for general corporate purposes, including the
advancement of TDS Telecom's fiber build program.
"Now that all of our fiber expansion communities have been
initially launched, TDS Telecom is continuing to make progress
towards its long-term goal of 1.2 million marketable fiber service
addresses," said Vicki L. Villacrez,
TDS Executive Vice President and CFO. "This transaction will
provide TDS with additional access to capital to support our
fiber program which includes investing in communities throughout
the US with quality broadband connectivity.
"Importantly, we structured this transaction to be permissible
under our existing debt agreements which allows us to preserve our
predominantly low-cost, long-dated capital structure. TDS' weighted
average cost of debt and preferred equity increases 30 basis points
to approximately 6.8% with this borrowing but still remains
attractive in today's high interest rate environment."
Milwood Hobbs, Jr., Head of
Sourcing & Origination at Oaktree, said, "Oaktree is excited to
partner with TDS to support its critical fiber network investments.
This capital will help enable TDS to provide reliable high speed
broadband capacity to new and often underserved areas. We believe
this infrastructure is vital to all communities."
The transaction is structured as a 5-year loan with the option
to be repaid at any time subject to applicable call protections.
TDS borrowed $300.0 million, less
original issue discount, at closing, and the remaining $75.0 million will be available to draw for 18
months subject to certain conditions precedent. Borrowings will
bear interest at a floating rate of SOFR +7%.
Wells Fargo and Citi served as
financial advisors to TDS on the transaction.
About TDS
Telephone and Data Systems, Inc. (TDS), a
Fortune 1000® company, provides wireless; broadband,
video and voice; and hosted and managed services to approximately 6
million connections nationwide through its businesses, UScellular,
TDS Telecom and OneNeck IT Solutions. Founded in 1969 and
headquartered in Chicago, TDS
employed 8,600 people as of March 31,
2024.
About Oaktree
Oaktree is a leader among global
investment managers specializing in alternative investments, with
$192 billion in assets under
management as of March 31, 2024. The
firm emphasizes an opportunistic, value-oriented and
risk-controlled approach to investments in credit, private equity,
real assets and listed equities. The firm has over 1,200 employees
and offices in 23 cities worldwide. For additional information,
please visit Oaktree's website at
http://www.oaktreecapital.com/.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995: All information set
forth in this news release, except historical and factual
information, represents forward-looking statements. This includes
all statements about the company's plans, beliefs, estimates, and
expectations. These statements are based on current estimates,
projections, and assumptions, which involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Important factors
that may affect these forward-looking statements include, but are
not limited to: whether any strategic alternatives for UScellular
will be successfully identified or completed; whether any such
strategic alternative will result in additional value for TDS or
its shareholders and whether the process will have an adverse
impact on TDS' businesses; intense competition; the ability to
attract people of outstanding talent throughout all levels of the
organization; TDS' smaller scale relative to larger competitors;
changes in demand, consumer preferences and perceptions, price
competition, or churn rates; advances in technology; impacts of
costs, integration problems or other factors associated with
acquisitions, divestitures or exchanges of properties and/or
expansion of TDS' businesses; the ability of the company to
successfully construct and manage its networks; difficulties
involving third parties with which TDS does business; uncertainties
in TDS' future cash flows and liquidity and access to the capital
markets; the ability to make payments on TDS and UScellular
indebtedness or comply with the terms of debt covenants; the effect
on TDS' business if the collateral securing its secured term loan
is foreclosed upon; conditions in the U.S. telecommunications
industry; the value of assets and investments; the state and
federal regulatory environment; pending and future litigation;
cyber-attacks or other breaches of network or information
technology security; control by the TDS Voting Trust; disruption in
credit or other financial markets; deterioration of U.S. or global
economic conditions; and the impact, duration and severity of
public health emergencies. Investors are encouraged to consider
these and other risks and uncertainties that are more fully
described under "Risk Factors" in the most recent filing of TDS'
Form 10-K.
For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
UScellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com
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SOURCE Telephone and Data Systems, Inc.