WideOpenWest Sells $1.02 Billion of Debt to Finance Knology Deal

WideOpenWest Finance LLC, a cable television, high-speed Internet and telephone services provider, raised $1.02 billion in a two-part bond offering to help fund its takeover of Knology Inc. (KNOL)

The Englewood, Colorado-based company owned by private- equity firm Avista Capital Partners sold $725 million of 10.25 percent senior unsecured bonds due July 2019 to yield 928 basis points more than similar-maturity Treasuries and $295 million of 13.375 percent, senior subordinated notes maturing in October 2019 with a 12.77 percentage-point spread, according to data compiled by Bloomberg.

Moody’s Investors Service rated the bonds Caa1, seven levels below investment grade, and Standard & Poor’s graded them an equivalent CCC+.

Proceeds will be used to fund the company’s acquisition of the West Point, Georgia-based cable-television operator and refinance existing debt, according to a person familiar with the offering who asked not to be identified citing lack of authorization to speak publicly about the sale.

WideOpenWest is also getting a $1.92 billion term loan to help finance the takeover. The six-year debt is expected to be priced at 95.75 cents to 96 cents on the dollar.

Average yields on U.S. bonds rated CCC and below have dropped to 12.45 percent from 14.4 percent at year-end, according to Bank of America Merrill Lynch index data.

WideOpenWest is acquiring Knology for about $1.5 billion, according to an April 18 statement distributed by Business Wire. Avista Capital bought WideOpenWest from Oak Hill Capital Partners LP and ABRY Partners LLC for an undisclosed amount in May 2006, Bloomberg data show.

Credit Suisse Group AG, Mitsubishi UFJ Financial Group Inc., Morgan Stanley, Royal Bank of Canada and SunTrust Banks Inc. managed the bond issue, Bloomberg data show.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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