Gogo (NASDAQ: GOGO), the leading global provider of broadband connectivity products and services for aviation, today announced the completion of its previously announced private offerings of $925 million aggregate principal amount of 9.875% senior secured notes due 2024 (the “Notes”) by its direct wholly owned subsidiary, Gogo Intermediate Holdings LLC, and its indirect wholly owned subsidiary, Gogo Finance Co. Inc.
“The enthusiastic response to our offerings allowed us to extend maturities and lower the interest rate on our senior secured debt1, without any dilution to shareholders, and we were able to upsize the transaction from $905 million to $925 million based on strong demand,” said Oakleigh Thorne, President and CEO of Gogo. “It also highlights Gogo’s position as the in-flight internet leader with significant runway as we serve attractive, underpenetrated markets with industry-leading technology.”
As a result of the transactions:
- We have received funds sufficient to repay the remaining $162 million of convertible notes due March 2020 in connection with our previously announced tender offer;
- We have reduced the interest rate on our senior secured debt from 12.5% to 9.875% while extending the maturity by two years to 2024;
- We have greater financing certainty and flexibility, with the option to redeem up to $150 million of the Notes within the first year at 103% of par (plus accrued and unpaid interest) with the proceeds from certain strategic investments;
- We have the flexibilty to enter into a $30 million revolving line of credit with an additional $30 million available based on future performance and leverage covenants; and
- We do not anticipate requiring additional capital based on our current plans and projected cash flow trajectory, except as needed to refinance our debt obligations maturing in 2022 and 2024.
As previously announced, the Notes and the related guarantees were offered in a private offering exempt from the registration requirements of the United States Securities Act of 1933, as amended (the “Securities Act”). The Notes and the guarantees were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act.
The Notes and the guarantees have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
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