CommScope Holding Shares Surge 30%

Investing.com — Shares of CommScope Holding Company, Inc. (NASDAQ:COMM) soared by 30% following the announcement of a comprehensive refinancing plan that addresses upcoming debt maturities and positions the company for future growth.

The Hickory, North Carolina-based network connectivity solutions provider disclosed the successful closing of a significant refinancing transaction with its first-lien secured lenders after Tuesday's market close.

CommScope entered into agreements including a $3.15 billion first-lien term loan maturing in 2029, and $1 billion in first-lien notes due in 2031. This strategic move enables CommScope to fully repay its senior unsecured notes due in 2025 and its existing senior secured term loan facility. Additionally, CommScope plans to utilize expected proceeds from the sale of its Outdoor Wireless Networks and Distributed Antenna Systems business units to Amphenol Corporation (NYSE:APH) for $2.1 billion, anticipated to close in the first quarter of 2025, to repay senior secured notes due in 2026 and partially redeem senior secured notes due in 2029.

President and CEO Chuck Treadway emphasized that the transaction represents a pivotal step for CommScope, improving its pro forma leverage ratio and providing the flexibility required to focus on core business areas and technological investments. Treadway stated that the company is well-positioned to capitalize on the recovery of the telecom industry in upcoming quarters.

The refinancing deal received strong support from key lenders, including funds managed by Apollo and Monarch Alternative Capital. The significant size of the transaction highlights the lenders' confidence in CommScope's leadership and future trajectory.

Upon completion of the asset sale and anticipated business performance improvements, CommScope expects to meet conditions for the first term loan rate step-down. The company projects that these actions, along with its business performance, will lower its total debt to Adjusted EBITDA ratio below 6.00:1.00 by the end of 2026, marking a solid step towards financial stability and growth.

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