Site Search

Entries in CFC (4)


Atlantic Tele-Network Announces Acquisition of Innovative Group of Companies

On Thursday, October 1st, Atlantic Tele-Network, Inc. (NASDAQ: ATNI) announced that it had acquired Caribbean Assets Holdings, LLC, the holding company for Innovative Communications Corporation (ICC) that provides cable TV, Internet and landline services primarily in the U.S. Virgin Islands.  ATN acquired the assets from the National Rural Utilities Cooperative Finance Corporation (CFC). 

Transaction Facts

  • ATN will pay approximately $145.0 million for the transaction.
  • The deal will be financed primarily with $85.0 million payable in cash and the option to finance the remaining $60.0 million of the purchase through a loan from an affiliate of CFC, the Rural Telephone Finance Cooperative (RTFC).
  • Deal is expected to close in mid-2016.

Deal History

  • In 2006, ICC was forced into involuntary bankruptcy after defaulting on RTFC loans; RTFC had loaned more than $500m to ICC between 1987 and 2001.
  • CFC purchased ICC’s assets through bankruptcy in 2010.
  • ICC majority shareholder Jeffrey Prosser appealed the sale to CFC to the Virgin Island Supreme Court, which upheld the sale to CFC in 2012.
  • Prosser co-founded of ATN in 1987 with Cornelius Prior Jr., current chairman of the board for ATN.
  • Prosser and Prior led ATN’s acquisition Virgin Island Telephone Company (Vitelco).
  • Management differences at ATN led to a split of the company’s assets with Prosser retaining Vitelco (dba Innovative).

Financial and Strategic Considerations

  • ATN is a provider of telecommunication services to rural, niche and other under-served markets and geographies in the United States, Bermuda and the Caribbean and owns and operates solar power systems in select locations across the United States. 
  • Enables ATN to offer quad play--wireless, broadband, cable and wireline telephone—in U.S. Virgin Islands. 
  • ICC’s company-wide operations revenue was approximately $100.0 million for its most recently completed fiscal year that ended May 31, 2015.

JSICA’s Take

  • The EV/TTM Rev in this transaction represents an implied multiple of 1.5x, a discount to recently observed ILEC deals in the U.S.    
  • Deal signals ATN’s desire to expand its operations in Caribbean after winding down is U.S. based wireless operations in recent years
  • ATN subsequently announced that it had agreed to acquire 51% of Bermuda based KeyTech Limited providing entry into the Cayman Islands market

CFC's Innovative Plans to Spend $78 Million to Upgrade Network

Source: Virgin Island Daily News

According to an article in the Virgin Island Daily News, Innovative Telephone submitted a modernization plan to the Virgin Island Public Service Commission outlining its modernization plan to overhaul Internet, phone and cable.

Innovative CEO Seth Davis said the four-year modernization plan will invest approximately $78 million in the territory's telecommunications infrastructure, the article said.

The company was taken over by creditor National Rural Utilities Cooperative Finance Corporation in October 2010.

In April 2009, National Rural Utilities Cooperative Finance Corporation made a credit bid to buy Innovative's telephone, cable TV, Internet and cellular phone holdings. The cooperative loaned Innovative more than $500 million between 1987 and 2001. Innovative defaulted on the loans and was forced into involuntary bankruptcy in 2007.


CFC Closes $650m Bond Sale

Source: CFC Press Release

National Rural Utilities Cooperative Finance Corporation (NYSE:NRC, "CFC") announced today that it has closed its previously announced underwritten public offering of $650m in collateral trust bonds (CTBs): $300m of 1.125% CTBs due 2013 and $350m of 1.9% CTBs due 2015. “The strong interest in CFC’s latest offering in the financial markets shows the tremendous confidence investors have in CFC and in the strength and stability of electric cooperatives,” said CFC ceo Sheldon C. Petersen.

The three-year bonds priced at a spread of 60 basis points over the yield on the three-year benchmark U.S. Treasury, and the five-year bonds priced at a spread of 75 basis points over the yield on the five-year benchmark U.S. Treasury. These bonds are rated A+ by Standard & Poor’s Corporation and A1 by Moody’s Investors Service.

The net proceeds from the offering will be used for general corporate purposes, including the repayment of short-term debt, primarily commercial paper.


CFC Appoints J. Andrew Don to SVP and Treasurer

National Rural Utilities Cooperative Finance Corporation (NYSE: NRU) (NYSE: NRN) (NYSE: NRC) (CFC) announced that J. Andrew Don, vp of Capital Market Relations, has been appointed svp and treasurer. The appointment became effective on June 1. Don’s new role entails oversight of the Treasury Group, which includes all funding operations for CFC, as well as investor relations, banking relations, rating agency liaison and the loan syndication function on behalf of CFC’s member borrowers. 

Don joined CFC in 1999 as the director of Loan Syndications. Prior to joining CFC, Don held the position of vp and manager of the Washington, D.C., office for The Bank of Tokyo–Mitsubishi. He has also worked for the Bank of Montreal and The Bank of New York. Don received a B.A. degree from Dickinson College and an M.B.A. degree from Fordham University.