LITTLE ROCK, Ark. - Uniti Group Inc. (NASDAQ:UNIT), a real estate investment trust focused on communications infrastructure, has entered into a bridge loan agreement for up to $350 million. The facility, managed by Uniti Fiber Bridge Borrower LLC, an indirect subsidiary of Uniti, will carry an initial interest rate based on Term SOFR plus a 3.75% margin, with rate increases depending on the loan's duration. This bridge loan is expected to be refinanced with a long-term asset-backed securities (ABS) facility, secured by Uniti Fiber network assets.
The bridge loan, which matures 18 months from the first draw, is part of Uniti's strategy to enhance liquidity and access long-term capital. Barclays Bank PLC served as the sole structuring agent, while Deutsche Bank AG (NYSE:DB) New York Branch and Citibank, N.A. were co-lead arrangers. Wilmington Trust, National Association is the administrative agent.
In addition to the new financing, Uniti has completed several asset sales. The company has divested its remaining interest in Bluebird Network LLC's fiber network, sold network assets to CableSouth Media III, LLC, and disposed of nearly all its wireless towers to CTI Towers, Inc. These transactions have generated approximately $87 million in cash. The assets sold had contributed roughly $4 million in revenue and $9 million in Adjusted EBITDA for the twelve-month period ending September 30, 2023.
Uniti's Chief Financial Officer, Paul Bullington, remarked on the company's ability to execute asset sales at favorable valuations, which he believes will further strengthen Uniti's balance sheet. As of September 30, 2023, Uniti owns approximately 139,000 fiber route miles and 8.4 million fiber strand miles across the United States.
This news is based on a press release statement from Uniti Group Inc.
InvestingPro Insights
In light of Uniti Group Inc.'s recent financial maneuvers, including the bridge loan agreement and asset sales, it's pertinent to consider the company's financial health and market performance. The InvestingPro data provides a snapshot of Uniti's current financial position:
- Market Capitalization: Uniti's market cap stands at $1.34 billion, which reflects the company's value as perceived by the market.
- P/E Ratio: The company has a negative price-to-earnings ratio of -38.37, indicating that investors are paying more for each dollar of earnings, which can be a sign of expected growth or potential overvaluation.
- Dividend Yield: With a substantial dividend yield of 10.47%, Uniti is rewarding its shareholders with significant income, which could be attractive to income-focused investors.
While Uniti's strategic asset sales have generated cash, the InvestingPro Tips highlight potential areas of concern and opportunity:
- The company operates with a significant debt burden, which is reflected in the need for a bridge loan to enhance liquidity.
- Despite the debt, analysts predict that Uniti will be profitable this year, offering a potential upside to investors.
For those interested in a deeper analysis, InvestingPro offers additional insights on Uniti Group Inc., including comprehensive financial metrics and expert commentary. Utilize the coupon code PRONEWS24 to receive an extra 10% off on a yearly or biyearly Pro and Pro+ subscription. There are 8 more InvestingPro Tips available that could help investors make more informed decisions.
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