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Public utilities

Vermont Public Utility Commission Approves Financing Transaction for Burlington Telecom

Strategic Insights

— 2 min read

The Vermont Public Utility Commission has given its approval to the financing transaction for Champlain Broadband LLC, d/b/a Burlington Telecom, allowing the company to access $525 million in credit facilities through a credit agreement with Schurz Communications, Inc. and CoBank, ACB et al. The financing is intended to provide an optimal capital structure to enable operations for all of Schurz's businesses, including Champlain Broadband, for the next five to seven years.

The Vermont Department of Public Service recommends that the Commission approve the petition without a hearing, citing that the proposed financing transaction is necessary to ensure that Champlain Broadband's liquidity levels are sufficient to fund its operations. The Commission has concluded that the proposed financing transaction is consistent with the general good of the State and that no hearing or further investigation is needed.

Key Takeaways:

  • The Vermont Public Utility Commission has approved the financing transaction for Champlain Broadband LLC, d/b/a Burlington Telecom.
  • The financing is made possible through a credit agreement with Schurz Communications, Inc. and CoBank, ACB et al, providing access to $525 million in credit facilities.
  • The proposed financing transaction is intended to provide an optimal capital structure to enable operations for all of Schurz's businesses, including Champlain Broadband, for the next five to seven years.
  • The Vermont Department of Public Service recommends that the Commission approve the petition without a hearing, citing that the proposed financing transaction is necessary to ensure that Champlain Broadband's liquidity levels are sufficient to fund its operations.
  • The proposed financing transaction will provide access to capital above and beyond Burlington Telecom's cash flow, enabling the company to maintain and strengthen viable broadband, telecommunications, and cable television competition within its existing and expanding marketplace.
  • Champlain Broadband must inform the Commission and the Department of any material change in the terms and conditions of the financing transaction before closing, and file notification of the closing and the terms of the transaction in the compliance subcase in ePUC within 10 days after the financing transaction is complete.

Statistics:

  • $525 million: The aggregate principal amount of available financing through the credit agreement.
  • 5-7 years: The expected duration of the financing agreement.
  • $275 million: The amount of a term loan facility that was fully drawn as of the closing date.
  • $260 million: The amount of term loan facility used at closing to refinance existing debt and pay financing fees.
  • 200-375 basis-point spread: The applicable basis-point spread for the variable interest rate.
  • 30 V.S.A. SS 108: The Vermont Public Utility Commission statute that requires the Commission to grant consent to a proposed financing transaction.
  • 3 V.S.A. SS 811: The Vermont Public Utility Commission statute that governs the proposal for decision process.

Sources:

  • Vermont Public Utility Commission Order, Case No. 23-1867-PET, dated 07/27/2023.
  • Prefiled testimony and exhibits of Gesumino Agostino, dated June 1, 2023.
  • Letter from the Vermont Department of Public Service, dated June 30, 2023.
  • Proposal for Decision, dated July 27, 2023.
  • Vermont Public Utility Commission, Vermont Department of Public Service, and Champlain Broadband LLC, d/b/a Burlington Telecom documents.

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