TelePacific Communications, a Los Angeles-based CLEC for SMEs in California and Nevada, has secured a $395 million senior credit facility. TelePacific is a portfolio company of Clarity Partners and Investcorp.
TelePacific Communications, the largest CLEC providing integrated voice and data telecommunications services to the small and medium-sized business (“SMB”) customer segment in California and Nevada, announced that it has successfully completed syndication of a $395 million senior credit facility to a group of institutional investors.
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Banc of America Securities LLC, acted as Joint Bookrunners and Joint Lead Arrangers, and Credit Suisse AG, as Administrative Agent and Collateral Agent. The facility is comprised of a $370 million term loan due in August 2015 and a $25 million revolving line of credit. The transaction improved the company’s debt maturity profile by refinancing debt that was scheduled to mature in 2011 and 2012, while also increasing operational flexibility. The facility priced at LIBOR plus 7.25%, including a LIBOR floor of 2%.
The new facility was rated B2 by Moody’s Investor Service. A portion of the proceeds of the facility are being used to retire existing bank debt and the net proceeds will be used for general corporate purposes. The $25 million revolving line of credit was not drawn at closing.
TelePacific, whose largest shareholders are affiliates of Investcorp SA and private equity investor Clarity Partners L.P., serves more than 39,000 SMB accounts throughout California and Nevada with over 1.1 million access line equivalents.
“The new bank facility is a very significant, positive accomplishment for TelePacific,” said TelePacific’s chief financial officer Tim Medina. “This facility makes it easier for TelePacific to expand its product set and invest more quickly in value creating projects like the Company’s ethernet over copper development and mobile services, and provides greater flexibility to pursue acquisitions than the previous senior credit facility.”
TelePacific has generated market-leading revenue growth and customer retention rates during its history through its disciplined approach of providing outstanding customer service over its facilities-based network.
2009 highlights included:
- Annual revenues grew to approximately $452.2 million for the year ending December 31, 2009 compared with $443.9 million for the year ending December 31, 2008;
- Access line growth in excess of 8% to achieve approximately 1.1 million lines in service by the end of 2009;
- Average monthly customer line churn of less than 1.3%; and
- A customer satisfaction rating of 94%.
TelePacific Communications is the leading competitive carrier that serves customers throughout California and Nevada. TelePacific is headquartered in Los Angeles and has customer care centers in Los Angeles and Stockton in California and Las Vegas in Nevada. In business since 1998, TelePacific provides services through a combination of TelePacific-owned switches and network infrastructure, including its own and leased robust fiber-optic network assets. Offering local and long distance voice, dedicated Internet access, private networking and data transport services as well as bundled voice and Internet solutions and wholesale services, TelePacific manages more than 39,000 SMB customer accounts with approximately 1.1 million access line equivalents in service. To find out more about TelePacific, visit www.telepacific.com.
Investcorp is a leading provider and manager of alternative investment products. It has offices in New York, London and Bahrain and is publicly traded on the London Stock Exchange (IVC) and Bahrain Stock Exchange (INVCORP). Investcorp has five lines of business: private equity, hedge funds, real estate, technology investment, and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography. Further information is available at www.investcorp.com.
About Clarity Partners L.P.
Clarity Partners, L.P. (“Clarity”), headquartered in Los Angeles, is a private equity fund focused on communications, media and business services sectors. Clarity is also a Co-General Partner of Clarity China, a China-based private equity fund focused on natural resources, renewable energy, and other general industries. Further information is available at www.claritypartners.net.