Cogent Communications Holdings,Inc. (NASDAQ:CCOI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry Into a Material Definitive Agreement.
On December2, 2016, Cogent Communications Group,Inc.
(Cogent), a wholly owned subsidiary of Cogent
Communications Holdings,Inc. (the Company), completed a
tack-on offering of $125 million in aggregate principal amount of
its 5.375% Senior Secured Notes due 2022 (the Notes),
priced at 100.375% of par value. The net proceeds from the
offering, after deducting discounts and commissions and estimated
offering expenses, were approximately $124.4 million, which
includes a premium of approximately $0.5 million paid by the
purchasers of the Notes. The net proceeds from the offering are
intended to be used for general corporate purposes, to repurchase
our common stock and/or to pay recurring or special dividends to
our stockholders. The Notes were issued by Cogent and are
guaranteed by each of Cogents domestic subsidiaries, subject to
certain exceptions, and the Company. The Companys guarantee is
unsecured and the Company will not be subject to the covenants
under the indenture governing the Notes. Interest on the Notes is
payable semi-annually in arrears on March1 and September1 of each
year, commencing on March1, 2017, to the persons who are
registered holders of the Notes at the close of business on the
February15 and August15 immediately preceding the applicable
interest payment date. The Additional Notes accrue interest from
September1, 2016.
The Notes were offered and sold only to qualified institutional
buyers in an unregistered offering to Rule144A under the
Securities Act of 1933, as amended (the Act). The Notes
have not been registered under the Act, and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
The Notes were issued to, and are governed by, a first
supplemental indenture, dated December2, 2016 (the Supplemental
Indenture), among Cogent, the Company, the other
guarantors named therein and Wilmington Trust, National
Association, as trustee and collateral agent, to the indenture,
dated February20, 2015 (the Existing Indenture and,
together with the Supplemental Indenture, the Indenture),
among Cogent, the Company, the other guarantors named therein and
Wilmington Trust, National Association, as trustee and collateral
agent, to which the Company previously issued $250 million
aggregate principal amount of 5.375% Senior Secured Notes due
2022 (the Existing Notes). The Notes offered in this
offering have substantially identical terms to the Existing Notes
(other than the date of the initial issuance, the date from which
interest will initially begin to accrue and the first interest
payment date) and were issued under the same CUSIP number. The
Notes constitute the same series of securities as the Existing
Notes for purposes of the Indenture, and will vote together on
all matters with such notes. A copy of the Existing Indenture,
including the form of Note, and the Supplemental Indenture are
attached to this Form8-K as Exhibits 4.1, 4.2 and 4.3 and the
description of the Indenture and the Notes in this report is a
summary and is qualified in its entirety by the terms of the
Indenture and the Notes, respectively, and is incorporated by
reference herein.
The Notes are Cogents senior secured obligations and are
guaranteed on a senior secured basis by each of Cogents domestic
subsidiaries, subject to certain exceptions. The Notes are also
guaranteed by the Company; however, the Companys guarantee is
unsecured and the Company will not be subject to the covenants
under the Indenture. The Notes will be effectively senior in
right of payment to all of Cogents and each subsidiary guarantors
senior unsecured obligations to the extent of the value of the
collateral securing the Notes and the subsidiary guarantees. The
Notes will be equal in right of payment with Cogents and each
subsidiary guarantors future unsecured indebtedness that is not
subordinated in right of payment to the Notes to the extent of
any insufficiency in the collateral securing the Notes and the
subsidiary guarantees, including Cogents 5.625% Senior Notes due
2021. The Notes will rank senior in right of payment to Cogents
and each subsidiary guarantors future subordinated debt, if any;
and will be structurally subordinated in right of payment to all
indebtedness and other liabilities of any of Cogents subsidiaries
that are not guarantors, which will only consist of immaterial
subsidiaries and foreign subsidiaries that do not guarantee other
indebtedness of Cogent. The Notes and related subsidiary
guarantees are secured by first-priority liens on substantially
all of the assets of Cogent and the subsidiary guarantors
(subject to certain exceptions and permitted liens), all of the
equity interests in any domestic subsidiary of Cogent and 65% of
the equity interests of first-tier foreign subsidiaries held by
Cogent and the subsidiary guarantors. Because the Companys
guarantee is unsecured, the Companys guarantee is not secured by
any of its assets.
Caution Concerning Forward-Looking Statements
Except for historical information and discussion contained
herein, statements contained in this release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to statements identified by words
such as believes, expects, anticipates, estimates, intends,
plans, targets, projects and similar expressions. The
statements in this release are based upon the current beliefs
and expectations of the Companys management and are subject to
significant risks and uncertainties. Actual results may differ
from those set forth in the forward-looking statements.
Numerous factors could cause or contribute to such differences,
including future economic instability in the global economy or
a contraction of the capital markets, which could affect
spending on Internet services and our ability to engage in
financing activities; the impact of changing foreign exchange
rates (in particular the Euro to US dollar and Canadian dollar
to US dollar exchange rates) on the translation of our non-US
dollar denominated revenues, expenses, assets and liabilities;
legal and operational difficulties in new markets; changes in
government policy and/or regulation, including rulesregarding
data protection, cyber security and net neutrality; increasing
competition leading to lower prices for our services; our
ability to attract new customers and to increase and maintain
the volume of traffic on our network; the ability to maintain
our Internet peering arrangements on favorable terms; our
reliance on an equipment vendor, Cisco Systems Inc., and the
potential for hardware or software problems associated with
such equipment; the dependence of our network on the quality
and dependability of third-party fiber providers; our ability
to retain certain customers that comprise a significant portion
of our revenue base; the management of network failures and/or
disruptions; and outcomes in litigation as well as other risks
discussed from time to time in our filings with the Securities
and Exchange Commission, including, without limitation, our
annual report on Form10-K for the fiscal year ended December31,
2015 and our Quarterly Report on Form10-Q for the quarters
ended September30, 2016 filed with the Securities and Exchange
Commission. The Company undertakes no duty to update any
forward-looking statement or any information contained in this
press release or in other public disclosures at any time.
Item 2.03. Creation of a Direct Financial Obligation or
an Obligation Under an Off-Balance Sheet Arrangement of a
Registrant.
The information required by Item 2.03 is contained in Item 1.01
and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
|
Exhibit Number |
|
Description |
|
4.1 |
First Supplemental Indenture related to the 5.375% Senior |
|
|
4.2 |
Indenture related to the 5.375% Senior Secured Notes, |
|
|
4.3 |
Formof 5.375% Senior Secured Notes due 2022 (included as |
About Cogent Communications Holdings, Inc. (NASDAQ:CCOI)
Cogent Communications Holdings, Inc. is a facility-based provider of Internet access and Internet Protocol (IP) communications services. The Company’s network is designed and optimized to transmit data using IP. The Company delivers its services to small and medium-sized businesses, communications service providers and other bandwidth-intensive organizations in North America, Europe and Asia. The Company offers on-net Internet access services through its own facilities, which run from its network to its customers’ premises. The Company offers its on-net services to customers located in buildings that are physically connected to its network. Its on-net service consists of high-speed Internet access and IP connectivity ranging from 100 Megabits per second to 100 Gigabits per second of bandwidth. It provides its on-net Internet access services to its net-centric and corporate customers. Cogent Communications Holdings, Inc. (NASDAQ:CCOI) Recent Trading Information
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) closed its last trading session down -0.15 at 36.15 with 681,762 shares trading hands.
