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Optimum Communications, Inc. (NYSE:OPTU) announced Tuesday that its subsidiaries entered into new credit agreements totaling $2 billion in principal, according to a statement based on a filing with the Securities and Exchange Commission. This move comes as the company, currently trading at $2.02 per share with a market cap of just $946 million, operates with a significant debt burden of over $26 billion according to InvestingPro data.
On Tuesday, CSC Holdings, LLC, an indirect wholly-owned subsidiary of Optimum Communications, entered into a Fourteenth Amendment to its existing credit agreement. The amendment provides for new incremental term loan commitments, known as Incremental Term Loan B-7 Commitments, totaling $2 billion. The loans mature on the earlier of January 15, 2028, or April 15, 2027, if certain other loans remain outstanding and have not been extended. This refinancing activity is critical as the company’s current ratio stands at 0.77, indicating its short-term obligations exceed its liquid assets.
The Incremental Term Loans B-7 may be structured as either Term SOFR or alternative base rate borrowings. The interest rates are set at either the Term SOFR rate plus 4.500% per annum or the alternate base rate plus 3.500% per annum. Proceeds from these loans were used to refinance all of CSC Holdings’ outstanding Incremental Term Loan B-6 and to pay associated fees and expenses.
Following this refinancing, Cablevision Litchfield, LLC and CSC Optimum Holdings, LLC, both indirect subsidiaries of Optimum Communications, entered into a new credit agreement, referred to as the UnSub Credit Agreement. This agreement also provides for initial term loan commitments totaling $2 billion. The new UnSub Term Loans mature on November 25, 2028, carry a fixed interest rate of 9.000% per annum, and do not require amortization. The proceeds from these loans were used to refinance all of CSC Holdings’ Incremental Term Loans B-7.
The company stated that the terms of these agreements are detailed in exhibits attached to its SEC filing. All information is based on a press release statement. OPTU’s stock has fallen significantly over the last three months, with year-to-date returns of -26.97%, according to InvestingPro data, which offers 13 additional ProTips about the company’s financial outlook.
In other recent news, Altice USA has been the subject of analyst attention, with Raymond James reiterating an Outperform rating and setting a price target of $3.50. However, Goldman Sachs has downgraded Altice USA to a Sell rating, citing competitive pressures in the broadband sector, with a price target of $2.00. Additionally, Altice France is exploring the sale of its SFR Business unit to manage debt, potentially valuing the unit at several billion euros. Creditors of Altice International have selected Houlihan Lokey as their financial adviser for upcoming debt talks, extending their cooperation agreement through March. Meanwhile, Altice International is considering a bid for Israel’s Hot Telecommunication Systems as part of ongoing asset sales. The New York Department of Public Service approved a reorganization requested by Altice USA for an asset-backed securities transaction. These developments reflect various strategic moves within Altice’s operations across different regions.
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