May 53 min read

TechNews: Telephone and Data Systems (NYSE: TDS) announces new $375 million unsecured debt financing

Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom and OneNeck IT Solutions.

Telephone and Data Systems, Inc. (NYSE: "TDS") announced today the closing of a $375 million unsecured debt financing with funds managed by Oaktree Capital Management, L.P. ("Oaktree"). The proceeds will be used for general corporate purposes, including the advancement of TDS Telecom's fiber build program.

"Now that all of our fiber expansion communities have been initially launched, TDS Telecom is continuing to make progress towards its long-term goal of 1.2 million marketable fiber service addresses," said Vicki L. Villacrez, TDS Executive Vice President and CFO. "This transaction will provide TDS with additional access to capital to support our fiber program which includes investing in communities throughout the US with quality broadband connectivity.

"Importantly, we structured this transaction to be permissible under our existing debt agreements which allows us to preserve our predominantly low-cost, long-dated capital structure. TDS' weighted average cost of debt and preferred equity increases 30 basis points to approximately 6.8% with this borrowing but still remains attractive in today's high interest rate environment."

Milwood Hobbs, Jr., Head of Sourcing & Origination at Oaktree, said, "Oaktree is excited to partner with TDS to support its critical fiber network investments. This capital will help enable TDS to provide reliable high speed broadband capacity to new and often underserved areas. We believe this infrastructure is vital to all communities."

The transaction is structured as a 5-year loan with the option to be repaid at any time subject to applicable call protections. TDS borrowed $300.0 million, less original issue discount, at closing, and the remaining $75.0 million will be available to draw for 18 months subject to certain conditions precedent. Borrowings will bear interest at a floating rate of SOFR +7%.

Wells Fargo and Citi served as financial advisors to TDS on the transaction.

About TDS

About Oaktree

Oaktree is a leader among global investment managers specializing in alternative investments, with $192 billion in assets under management as of March 31, 2024. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 1,200 employees and offices in 23 cities worldwide. For additional information, please visit Oaktree's website at http://www.oaktreecapital.com/.

For more information about TDS and its subsidiaries, visit:

TDS: www.tdsinc.com

UScellular: www.uscellular.com

TDS Telecom: www.tdstelecom.com

OneNeck IT Solutions: www.oneneck.com

SOURCE Telephone and Data Systems, Inc.

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