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TDS Down on New Financing





Telephone and Data Systems, Inc. (NYSE: TDS) shares backtracked Friday, after the company announced the closing of a $375-million unsecured debt financing with funds managed by Oaktree Capital Management, L.P. 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 CFO Vicki L. Villacrez. “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.

The transaction is structured as a five-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%.

TDS reported total operating revenues of $1,262 million for the first quarter of 2024, versus $1,303 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $12 million and $0.10, respectively, for the first quarter of 2024 compared to $(9) million and $(0.08), respectively, in the same period one year ago.

TDS shares dropped $1.12, or 6.9%, to $15.09.



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