Telecom Places Private Bond Facility

Columbus International has sold $82m in new 2017 bonds, under a senior notes facility that allows it to borrow up to $143m more on the same terms. The 9.5% bonds were placed with a single private high-yield fund, and no bank was involved, according to a company official. The Barbados-based Caribbean telecom operator may draw down additional amounts during the next year, and the notes are callable after 2.5 years. The proceeds will be used to accelerate the completion of current capital plans, fund potential future acquisitions, enhance balance sheet liquidity and flexibility and for general corporate purposes. “The new notes facility is credit negative to Columbus since it increases its leverage while free cash flow remains negative,” says Moody’s, which rates Columbus B2. Columbus’ leverage was 3.9x adjusted debt to Ebitda as of March 31, and the agency had expected it to be “well below” 4x. Columbus placed a $450m 11.5% 2014 international bond in 2009.