Cincinnati Bell Inc.
) announced that it is planning amendments to its credit terms
with a bank ready to source a new $400 million Term Loan B
Facility maturing 2020. The company expects to use this amount
for repaying its 8 1/4% senior notes maturing 2017 and other
Cincinnati Bell's short-term liquidity position, including
$5.5 million of cash and cash equivalents and $192.0 million of
undrawn credit facility remains a healthy financial base
supporting its operations. The company also reduced its net debt
position to $2.19 billion in the second quarter from $2.67
billion at the end of 2012. Further, with the formation of the
new entity, CyrusOne, the company removed all debts of the former
from its balance sheet.
We believe the company's balance sheet strength stems from its
strategy of offering attractively priced service bundles,
including customized blends of local and long-distance phone
service, broadband Internet access, and strength in wireless
operations will enable it to satiate the growing demand. With a
well-designed marketing program, plus well-known brand and strong
reputation for offering high-quality service, the company is
likely to add more market share.
We believe that Cincinnati Bell enjoys a comfortable market
position owing to its distinguished brand name, attractively
priced service bundles as well as proactive marketing and
expansion strategies. Cincinnati's Wireline segment remains the
prime growth driver for the company based on its strong Fioptics
business. New projects and the spin-off of CyrusOne into a
separate entity are expected to work in favor of the company and
aid earnings growth in the future.
Cincinnati Bell, which operates with other telecom companies
Frontier Communications Corp.
), currently has a Zacks Rank # 1 (Strong Buy).
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