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Uniti Group Inc. (Nasdaq: UNIT) announced the successful completion of Windstream’s consent solicitation to amend the indenture governing their 7.750% Senior Secured Notes due 2028. The amendments allow for the consolidation of Windstream and Uniti’s debt into a single silo capital structure following their planned merger. This change is expected to result in a simplified capital structure and remove perceived overhangs related to current master lease agreements.
The amendments modify covenants to permit the post-closing reorganization, align collateral packages, and grant authorizations to implement changes. The merger is expected to close in the second half of 2025, subject to customary conditions and regulatory approvals. The implementation of these amendments is not a condition for closing the merger, and Uniti’s outstanding indebtedness terms will not change as a result.
Uniti Group Inc. (Nasdaq: UNIT) ha annunciato il completamento con successo della richiesta di consenso di Windstream per modificare l’atto che regola i loro Prestiti Senior Garantiti al 7,750% in scadenza nel 2028. Le modifiche consentono di consolidare i debiti di Windstream e Uniti in una singola struttura di capitale silo a seguito della loro fusione pianificata. Si prevede che questo cambiamento porti a una struttura di capitale semplificata e rimuova sovraccarichi percepiti relativi agli attuali contratti di locazione master.
Le modifiche modificano i vincoli per consentire la riorganizzazione post-chiusura, allineare i pacchetti di garanzia e concedere autorizzazioni per implementare i cambiamenti. Si prevede che la fusione si concluderà nella seconda metà del 2025, soggetta a condizioni consuete e approvazioni regolatorie. L’attuazione di queste modifiche non è una condizione per la chiusura della fusione e i termini dell’indebitamento in corso di Uniti non cambieranno come risultato.
Uniti Group Inc. (Nasdaq: UNIT) anunció la finalización exitosa de la solicitud de consentimiento de Windstream para enmendar el contrato que regula sus Bonos Senior Asegurados al 7,750% con vencimiento en 2028. Las enmiendas permiten la consolidación de la deuda de Windstream y Uniti en una única estructura de capital silo tras su fusión planificada. Se espera que este cambio resulte en una estructura de capital simplificada y elimine sobrecargas percibidas relacionadas con los actuales contratos de arrendamiento maestro.
Las enmiendas modifican los pactos para permitir la reorganización posterior al cierre, alinear los paquetes de garantía y otorgar autorizaciones para implementar cambios. Se espera que la fusión se cierre en la segunda mitad de 2025, sujeta a condiciones habituales y aprobaciones regulatorias. La implementación de estas enmiendas no es una condición para cerrar la fusión y los términos de deuda pendiente de Uniti no cambiarán como resultado.
유니티 그룹 Inc. (Nasdaq: UNIT)은 윈드스트림의 2028년 만기 7.750% 선순위 보증부 채권을 관리하는 계약을 수정하기 위한 동의 요청의 성공적인 완료를 발표했습니다. 이러한 수정은 예정된 합병에 따라 윈드스트림과 유니티의 부채를 단일 사일로 자본 구조로 통합할 수 있도록 합니다. 이러한 변화는 자본 구조를 간소화하고 현재의 마스터 리스 계약과 관련된 인식된 부담을 제거할 것으로 예상됩니다.
수정 사항은 거래 종료 후 재조직을 허용하고 담보 패키지를 일치시키며 변경 사항을 구현할 수 있는 권한을 부여합니다. 합병은 2025년 하반기 중에 종료될 것으로 예상되며, 일반적인 조건 및 규제 승인을 받아야 합니다. 이러한 수정의 실행은 합병 종료의 조건이 아니며, 유니티의 미지급 채무 조건은 결과적으로 변경되지 않습니다.
Uniti Group Inc. (Nasdaq: UNIT) a annoncé l’achèvement réussi de la sollicitation de consentement de Windstream pour modifier l’indenture régissant leurs Obligations Garanties Senior de 7,750% échéant en 2028. Les modifications permettent de consolider la dette de Windstream et d’Uniti en une seule structure de capital silo suite à leur fusion prévue. Ce changement devrait aboutir à une structure de capital simplifiée et éliminer les surcharges perçues liées aux contrats de location principaux actuels.
Les modifications modifient les engagements pour autoriser la réorganisation post-clôture, aligner les paquets de garantie et accorder des autorisations pour mettre en œuvre des changements. La fusion devrait se conclure dans la seconde moitié de 2025, sous réserve des conditions habituelles et des approbations réglementaires. La mise en œuvre de ces modifications n’est pas une condition pour la clôture de la fusion et les conditions d’endettement en cours d’Uniti ne changeront pas en raison de cela.
Uniti Group Inc. (Nasdaq: UNIT) gab den erfolgreichen Abschluss der Zustimmungserklärung von Windstream zur Änderung der Urkunde bekannt, die ihre 7,750% Senior Secured Notes mit Fälligkeit 2028 regelt. Die Änderungen ermöglichen die Konsolidierung der Schulden von Windstream und Uniti in eine einzige Silo-Kapitalstruktur im Rahmen ihrer geplanten Fusion. Diese Änderung wird voraussichtlich zu einer vereinfachten Kapitalstruktur führen und als Überhang empfundene Belastungen im Zusammenhang mit den aktuellen Master-Leasingverträgen beseitigen.
Die Änderungen modifizieren die Verpflichtungen, um die Reorganisation nach dem Abschluss zuzulassen, die Sicherheitenpakete anzugleichen und Befugnisse zur Umsetzung von Änderungen zu erteilen. Die Fusion wird voraussichtlich in der zweiten Hälfte des Jahres 2025 abgeschlossen, vorbehaltlich üblicher Bedingungen und regulatorischer Genehmigungen. Die Umsetzung dieser Änderungen ist keine Voraussetzung für den Abschluss der Fusion, und die Bedingungen der ausstehenden Verschuldung von Uniti werden sich nicht ändern.
Positive
- Successful completion of Windstream’s consent solicitation for indenture amendments
- Amendments allow for consolidation of Windstream and Uniti’s debt into a single silo structure
- Expected simplification of capital structure post-merger
- Potential for lower debt yields by eliminating renewal overhang
- Alignment of collateral packages for Windstream and Uniti secured indebtedness
Negative
- Merger completion not expected until second half of 2025
- Post-Closing Reorganization cannot be implemented under current terms of Windstream’s credit agreement
- No assurance that the Post-Closing Reorganization will occur
The successful completion of Windstream’s consent solicitation marks a significant step towards streamlining the capital structure post-merger with Uniti. This move is strategically positive as it paves the way for a single silo debt structure, potentially leading to:
- Simplified operations and reduced administrative complexities
- Possible lower debt yields, improving the combined entity’s financial efficiency
- Elimination of renewal overhang related to master lease agreements
However, investors should note that the merger is still subject to regulatory approvals and is not expected to close until the second half of 2025. The long timeline introduces uncertainty and potential market risks. While this development is promising, it’s important to monitor the progress of regulatory approvals and any potential hurdles in the merger process.
The consent solicitation’s success is a important legal milestone for the Uniti-Windstream merger. Key legal implications include:
- Modification of covenants to allow for the consolidation of credit groups
- Alignment of collateral packages for secured indebtedness
- Option for Windstream to apply push-down accounting post-merger
These changes provide greater flexibility in the post-merger structure. However, it’s important to note that the Post-Closing Reorganization is not guaranteed, as it still requires amendments to Windstream’s credit agreement. Investors should be aware that while this consent paves the way for potential benefits, the final structure remains subject to further legal and financial maneuvering.
Windstream’s Indenture Will Now Allow for Collapse of Dual Debt Silos Upon Closing of Planned Merger
LITTLE ROCK, Ark., Sept. 18, 2024 (GLOBE NEWSWIRE) — Uniti Group Inc. (“Uniti”) (Nasdaq: UNIT) announced today the successful completion of the consent solicitation by Windstream Services, LLC and Windstream Escrow Finance Corp. (collectively, the “Windstream Co-Issuers”), each a subsidiary of Windstream Holdings II, LLC (“Windstream”), to amend the indenture (the “Windstream Indenture”) governing the Windstream Co-Issuers’ 7.750% Senior Secured Notes due 2028 (the “Windstream Notes”).
“We are pleased that Windstream has successfully completed its consent solicitation and we value the continued support from both Uniti and Windstream investors and creditors. This consent allows for Windstream’s debt to be portable into a single silo capital structure with Uniti’s debt under Windstream’s indenture after the closing of the pending merger, which would result in a more simplified capital structure, while also removing perceived overhangs relating to the current master lease agreements,” commented Paul Bullington, Senior Vice President, Chief Financial Officer & Treasurer.
As of 5:00 pm New York City time on September 18, 2024, the expiration time for the consent solicitation, valid consents from holders of the requisite principal amount of the outstanding Windstream Notes were received and not revoked.
The Indenture Amendments (i) modify covenants to expressly permit the consolidation of the credit groups of Windstream and Uniti into a single debt capital structure with a common parent entity (such consolidation, the “Post-Closing Reorganization”) following the closing of the merger (the “Merger”) contemplated by the Agreement and Plan of Merger, dated as of May 3, 2024, between Windstream and Uniti, (ii) on and from the date of the Post-Closing Reorganization, modify covenants to expressly permit the outstanding indebtedness, liens and investments of Uniti in the resulting consolidated capital structure and to align the collateral packages for the Windstream and Uniti secured indebtedness, (iii) grant authorizations to agents and trustees to implement the Indenture Amendments, and (iv) on and from the date of the Merger, allow Windstream to have the option to apply push-down accounting for the effects of the Merger to Windstream’s financial statements. Please refer to Uniti’s Current Report on Form 8-K filed with the SEC on September 11, 2024 for additional information concerning the Indenture Amendments.
The Indenture Amendments were sought to allow the consolidation of Windstream’s indebtedness into a single silo capital structure with Uniti’s indebtedness under a common parent following consummation of the Merger and to modify certain terms of the Windstream Notes to align them with the terms of the Uniti’s indebtedness. Under this combined structure, the master lease agreements between Uniti and Windstream would be arrangements between entities within the single silo (if they are not terminated), effectively reducing the contractual obligations of Windstream. A combined credit silo is also believed to potentially enable lower debt yields by eliminating renewal overhang relating to the master lease arrangements (if not terminated) and simplify operations for the combined company.
The Windstream Co-Issuers intend to enter a supplemental indenture to adopt the Indenture Amendments as soon as practicable, which will become effective upon its execution. The Indenture Amendments will become operative upon Windstream’s payment of the consent fee associated with the consent solicitation, which Windstream intends to pay on or shortly before the closing of the Merger.
The Implementation of the Indenture Amendments is not a condition to the closing of the Merger, which Uniti and Windstream currently expects to occur in the second half of 2025, subject to the satisfaction or waiver of customary closing conditions, including certain regulatory approvals.
Windstream may also seek amendments to Windstream’s existing credit agreement that are substantially similar to the Indenture Amendments. The Post-Closing Reorganization cannot be implemented under the current terms of Windstream’s credit agreement, and there can be no assurance that the Post-Closing Reorganization will occur.
The terms of Uniti’s outstanding indebtedness will not change as a result of the implementation of the Indenture Amendments.
ABOUT UNITI
Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of fiber and other wireless solutions for the communications industry. As of June 30, 2024, Uniti owns approximately 142,000 fiber route miles, 8.6 million fiber strand miles, and other communications real estate throughout the United States. Additional information about Uniti can be found on its website at www.uniti.com.
NO OFFER OR SOLICITATION
This communication and the information contained in it are provided for information purposes only and are not intended to be and shall not constitute a solicitation of any vote or approval, or an offer to sell or solicitation of an offer to buy, or an invitation or recommendation to subscribe for, acquire or buy securities of Uniti, Windstream or Windstream Parent, Inc., the proposed combined company following the closing of the Merger (as defined below) (“New Uniti”) or any other financial products or securities, in any place or jurisdiction, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the contemplated Merger, New Uniti has filed a registration statement on Form S-4 with the SEC that contains a proxy statement/prospectus and other documents, which has not yet become effective. Once effective, Uniti will mail the proxy statement/prospectus contained in the Form S-4 to its stockholders. This communication is not a substitute for any registration statement, proxy statement/prospectus or other documents that may be filed with the SEC in connection with the Merger.
THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER CONTAINS IMPORTANT INFORMATION ABOUT UNITI, WINDSTREAM, NEW UNITI, THE MERGER AND RELATED MATTERS. INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS AND SUCH OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THE PROXY STATEMENT/PROSPECTUS AND SUCH DOCUMENTS, BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE MERGER.
The proxy statement/prospectus, any amendments or supplements thereto and all other documents filed with the SEC in connection with the Merger will be available free of charge on the SEC’s website (at www.sec.gov). Copies of documents filed with the SEC by Uniti will be made available free of charge on Uniti’s investor relations website (at https://investor.uniti.com/financial-information/sec-filings).
PARTICIPANTS IN THE SOLICITATION
Uniti, Windstream and their respective directors and certain of their executive officers and other employees may be deemed to be participants in the solicitation of proxies from Uniti’s stockholders in connection with the Merger. Information about Uniti’s directors and executive officers is set forth in the sections titled “Proposal No. 1 Election of Directors” and “Security Ownership of Certain Beneficial Owners and Management” included in Uniti’s proxy statement for its 2024 annual meeting of stockholders, which was filed with the SEC on April 11, 2024 (and which is available at https://www.sec.gov/Archives/edgar/data/1620280/000110465924046100/0001104659-24-046100-index.htm), the section titled “Directors, Executive Officers and Corporate Governance” included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 29, 2024 (and which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/1620280/000162828024008054/unit-20231231.htm), and subsequent statements of beneficial ownership on file with the SEC and other filings made from time to time with the SEC. Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of Uniti stockholders in connection with the Merger, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in the proxy statement/prospectus and other relevant materials filed by New Uniti with the SEC. These documents can be obtained free of charge from the sources indicated above.
FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements, including within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by terms such as “may,” “will,” “appears,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern expectations, strategy, plans, or intentions. However, the absence of these words or similar terms does not mean that a statement is not forward-looking. All forward-looking statements are based on information and estimates available to Uniti and Windstream at the time of this communication and are not guarantees of future performance.
Examples of forward-looking statements in this communication (made at the date of this communication unless otherwise indicated) include, among others, statements regarding the Merger and the future performance of Uniti, Windstream and New Uniti (the “Merged Group”), whether Windstream amends the terms of its existing credit agreement, the implementation and expected effects of the Post-Closing Reorganization, the perceived and potential synergies and other benefits of the Merger, and expectations around the financial impact of the Merger on the Merged Group’s financials. In addition, this communication contains statements concerning the intentions, beliefs and expectations, plans, strategies and objectives of the directors and management of Uniti and Windstream for Uniti and Windstream, respectively, and the Merged Group, the anticipated timing for and outcome and effects of the Merger (including expected benefits to shareholders of Uniti), expectations for the ongoing development and growth potential of the Merged Group and the future operation of Uniti, Windstream and the Merged Group.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement and may include statements regarding the expected timing and structure of the Merger; the ability of the parties to complete the Merger considering the various closing conditions; the expected benefits of the Merger, such as improved operations, enhanced revenues and cash flow, synergies, growth potential, market profile, business plans, expanded portfolio and financial strength; the competitive ability and position of New Uniti following completion of the Merger; and anticipated growth strategies and anticipated trends in Uniti’s, Windstream’s and, following the expected completion of the Merger, New Uniti’s business.
In addition, other factors related to the Merger that contribute to the uncertain nature of the forward-looking statements and that could cause actual results and financial condition to differ materially from those expressed or implied include, but are not limited to: the satisfaction of the conditions precedent to the consummation of the Merger, including, without limitation, the receipt of shareholder and regulatory approvals on the terms desired or anticipated; unanticipated difficulties or expenditures relating to the Merger, including, without limitation, difficulties that result in the failure to realize expected synergies, efficiencies and cost savings from the Merger within the expected time period (if at all); potential difficulties in Uniti’s and Windstream’s ability to retain employees as a result of the announcement and pendency of the Merger; risks relating to the value of New Uniti’s securities to be issued in the Merger; disruptions of Uniti’s and Windstream’s current plans, operations and relationships with customers caused by the announcement and pendency of the Merger; legal proceedings that may be instituted against Uniti or Windstream following announcement of the Merger; funding requirements; regulatory restrictions (including changes in regulatory restrictions or regulatory policy) and risks associated with general economic conditions.
Additional factors that could cause actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements are detailed in the filings with the SEC, including Uniti’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, periodic current reports on Form 8-K and other documents filed with the SEC.
There can be no assurance that the Merger will be implemented or that plans of the respective directors and management of Uniti and Windstream for the Merged Group, including the Post-Closing Reorganization, will proceed as currently expected or will ultimately be successful. Investors are strongly cautioned not to place undue reliance on forward-looking statements, including in respect of the financial or operating outlook for Uniti, Windstream or the Merged Group (including the realization of any expected synergies).
Except as required by applicable law, Uniti does not assume any obligation to, and expressly disclaims any duty to, provide any additional or updated information or to update any forward-looking statements, whether as a result of new information, future events or results, or otherwise. Nothing in this communication will, under any circumstances (including by reason of this communication remaining available and not being superseded or replaced by any other presentation or publication with respect to Uniti, Windstream or the Merged Group, or the subject matter of this communication), create an implication that there has been no change in the affairs of Uniti or Windstream since the date of this communication.
INVESTOR AND MEDIA CONTACTS:
Paul Bullington, 251-662-1512
Senior Vice President, Chief Financial Officer & Treasurer
paul.bullington@uniti.com
Bill DiTullio, 501-850-0872
Vice President, Investor Relations & Treasury
bill.ditullio@uniti.com
This press release was published by a CLEAR® Verified individual.
FAQ
What was the purpose of Windstream’s consent solicitation for its 7.750% Senior Secured Notes due 2028?
The consent solicitation aimed to amend the indenture to allow for the consolidation of Windstream and Uniti’s debt into a single silo capital structure following their planned merger, simplifying the overall capital structure.
When is the merger between Uniti Group Inc. (UNIT) and Windstream expected to close?
The merger between Uniti Group Inc. (UNIT) and Windstream is currently expected to close in the second half of 2025, subject to customary closing conditions and regulatory approvals.
How will the indenture amendments affect Uniti Group Inc.’s (UNIT) outstanding indebtedness?
The terms of Uniti Group Inc.’s (UNIT) outstanding indebtedness will not change as a result of the implementation of the indenture amendments.
What are the potential benefits of consolidating Windstream and Uniti Group Inc.’s (UNIT) debt structures?
Consolidating the debt structures could lead to a simplified capital structure, potentially lower debt yields, and remove perceived overhangs related to current master lease agreements between Windstream and Uniti Group Inc. (UNIT).
