Uniti Group Achieves Milestone with Successful Consent Solicitation

Uniti Group Completes Windstream’s Consent Solicitation Success

Uniti Group Inc. (“Uniti”) has recently announced the successful conclusion of a key consent solicitation aimed at streamlining financial structures in conjunction with Windstream Services, LLC and Windstream Escrow Finance Corp. This collaborative effort underscores Uniti's commitment to enhancing operational efficiencies as it prepares for a significant merger with Windstream.

Understanding the Consent Solicitation

The consent solicitation process carried out by Windstream’s subsidiaries was focused on amending the indenture for the senior secured notes, specifically the 7.750% notes due in 2028. This amendment is critical as it allows for the consolidation of debts and aligns the financial obligations between Uniti and Windstream.

Strategic Importance of the Amendment

Paul Bullington, Senior Vice President and CFO of Uniti, expressed satisfaction with the successful completion of this consent solicitation. The modifications will facilitate the movement of Windstream's debt into a centralized capital structure, effectively simplifying financial oversight and potentially removing burdens from existing agreements.

As of the cutoff date for the solicitation, valid consents were promptly obtained, indicating strong support from existing holders of Windstream’s notes. The amendments sought to grant flexibility in managing the resulting consolidated capital structure post-merger.

Key Features of the Indenture Amendments

Several fundamental changes are proposed under the Indenture Amendments:

• Clear permission for the integration of debt structures between Windstream and Uniti.
• Adjustments to covenants to account for the inclusion of Uniti’s financial obligations.
• Authority given to agents and trustees to execute these amendments effectively.
• Options available for Windstream to adopt push-down accounting for their financial reporting.

Future Implications for Uniti and Windstream

This operational restructuring will lead to more streamlined processes and may mitigate financial risks associated with the existing master lease agreements. Furthermore, Uniti continues to anticipate that this combined credit silo could potentially lower overall debt yields and ease operational complexities.

Uniti and Windstream aim to finalize a supplemental indenture to adopt these changes swiftly. These changes will come into full effect once Windstream makes the necessary consent fee payments associated with this solicitation.

Prospects Following the Merger

While the Indenture Amendments are a key step, they are not a prerequisite for the upcoming merger, which is projected to occur in the latter part of the year. The merger will bring together the strengths of both entities, enhancing their positioning in the marketplace.

Windstream may also explore similar amendments to its existing credit arrangements, further consolidating its financial positioning in anticipation of the merger. However, the current credit agreement does impose restrictions that may limit execution.

Stability of Uniti’s Financial Obligations

Despite the significant changes in terms of Windstream, it is important to note that the financial obligations associated with Uniti's existing debts remain unchanged. This stability provides confidence to stakeholders as the transition period unfolds.

About Uniti Group Inc.

As a leading provider in the communications sector, Uniti specializes in the acquisition and construction of vital communications infrastructure. With a robust portfolio that includes over 142,000 fiber route miles and extensive fiber strands, Uniti is well-positioned to meet the evolving demands of the industry.

Frequently Asked Questions

What is the purpose of the consent solicitation?

The consent solicitation aims to amend the agreements governing Windstream's secured notes to consolidate debt under a single capital structure with Uniti.

How will the amendments affect Windstream's future?

The amendments will simplify Windstream’s debt management and potentially reduce financial burdens, aligning it more closely with Uniti’s financial framework.

When is the expected merger to take place?

Current expectations indicate that the merger is anticipated to occur in the later part of the year, subject to regulatory and other customary approval processes.

What are the expected benefits of this merger?

The merger is expected to deliver operational efficiencies, enhance market positioning, and create a more unified organizational structure for both Uniti and Windstream.

Who can I contact for more information?

For inquiries, interested parties can reach out to Paul Bullington at 251-662-1512 or via email at paul.bullington@uniti.com.

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