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CST: 18/07/2019 20:24:41   

Sorenson Communications, LLC, Sorenson Holdings, LLC and Sorenson Finance Corp. Announce Expiration and Final Results of Private Invitation to Exchange 13.0% Senior Unsecured PIK Toggle Notes due 2021 and Related Consent Solicitation

84 Days ago

SALT LAKE CITY, April 25, 2019 (GLOBE NEWSWIRE) -- Sorenson Communications, LLC (the “Borrower”), Sorenson Holdings, LLC (“HoldCo”) and Sorenson Finance Corp. (together with HoldCo, the “Issuers,” and the Issuers together with the Borrower, the “Company”) announced today the expiration and final results of their previously announced invitation (the “Invitation”) to holders (“Holders”) of 13.0% Senior Unsecured PIK Toggle Notes due 2021 issued by the Issuers (the “Existing Notes”) to exchange their Existing Notes for cash, term loans under the Borrower’s new second lien term loan credit facility (the “New Second Lien Term Loans”) or a combination thereof and the related solicitation of consents (the “Consent Solicitation”).  The Company made the Invitation and Consent Solicitation pursuant to the confidential offer to purchase, information memorandum and consent solicitation statement, dated March 27, 2019 (the “Information Memorandum”).

The deadline to participate in the Invitation and Consent Solicitation (the “Expiration Time”), the early participation time, as extended (the “Early Participation Time”) and the withdrawal deadline, as extended (the “Withdrawal Deadline”) each occurred at 5:00 p.m., New York City time, on April 24, 2019.  As of the Expiration Time, the Company had received valid deliveries of approximately $98.1 million in aggregate principal amount of the Existing Notes (or approximately 99.2% of the outstanding Existing Notes) that had not been validly rescinded as of the Expiration Time. The Company expects to accept all such delivered Existing Notes and enter into the New Second Lien Term Loans on the settlement date of the Invitation (the “Settlement Date”), which is expected to be on or about April 29, 2019. Because of the previously announced extension of the Early Participation Time to the Expiration Time, all Holders who validly delivered Existing Notes by the Expiration Time (and delivered any other required deliverables by the relevant deadlines) and whose deliveries are accepted by the Company will receive the Total Offer Consideration (as defined below) on the Settlement Date. After giving effect to the cancellation of the Existing Notes accepted in the Invitation, approximately $0.7 million in aggregate principal amount of the Existing Notes will remain outstanding.

The following table sets forth the aggregate principal amount of Existing Notes that have participated in the Invitation and Consent Solicitation as of the Expiration Time, and the respective aggregate principal amounts of such Existing Notes for which Holders elected cash (“Cash Consideration”) and New Second Lien Term Loans (“Loan Consideration”) as their preferred form of consideration.

Existing Notes
  CUSIPs / ISINs   Outstanding
Aggregate
Principal Amount
  Aggregate Principal Amount of Existing Notes Validly Delivered as of the Expiration Time   Aggregate Principal Amount of Holders Electing Cash Consideration as of the Expiration Time   Aggregate Principal Amount of Holders Electing Loan Consideration as of the Expiration Time
13.0% Senior Unsecured PIK Toggle Notes due 2021   CUSIP Nos. 83583T AA5, U8358L AA9 /
ISIN Nos. US83583TAA51, USU8358LAA99
  $98,862,326   $98,120,048   $43,698,342   $54,421,706
                     

As previously announced, upon the terms and subject to the conditions set forth in Information Memorandum and the related note delivery letter and consent, Holders who have participated in the Invitation and Consent Solicitation at or prior to the Early Participation Time (which is the same time as the Expiration Time) will receive the Total Exchange Consideration, as specified in the table below. Because Holders electing Cash Consideration as their preferred form of consideration participated in the Invitation and Consent Solicitation prior to the Expiration Time with respect to more than $25 million aggregate principal amount of Existing Notes, such Holders will receive a pro rata portion of the $25 million “Cash Pool” as described in the Information Memorandum, and the remainder of their consideration in the form of New Second Lien Term Loans, and Holders that elected Loan Consideration as their preferred form of consideration prior to the Expiration Time will receive their entire consideration in the form of New Second Lien Term Loans. In addition, all accrued and unpaid interest on Existing Notes exchanged in the Invitation from the last interest payment date up to, but not including, the Settlement Date will be paid in cash on the Settlement Date.

Based on the final participation in the Invitation, the following table provides the approximate Total Exchange Consideration due on the Settlement Date to each Holder who participated in the Invitation:

    For each $1,000 Principal Amount of Existing Notes Validly Delivered and Not Validly Rescinded Prior to the Expiration Time(1)
    Total Exchange Consideration for Holders Who Elected Cash Consideration as Preferred Form of Consideration   Total Exchange Consideration for Holders Who Elected Loan Consideration as Preferred Form of Consideration
Participation as of the Expiration Time   Aggregate Principal Amount of Holders Electing Cash Consideration   Cash Pool   Approximate Cash Consideration   Approximate Principal Amount of New Second Lien Term Loans   Approximate Cash Consideration   Approximate Principal Amount of New Second Lien Term Loans
$98,120,048
  $43,698,342   $25,000,000   $572.10   $427.90   $0   $1,000
                         
  1. Holders that participate in the Invitation will also receive accrued and unpaid interest on their validly delivered (and not validly rescinded) Existing Notes participating in the Invitation up to, but not including, the Settlement Date, in cash.

Holders of Existing Notes who participated in the Invitation by delivering their Existing Notes also consented to certain amendments (the “Amendments”) to the indenture governing the Existing Notes, dated as of April 30, 2014, as supplemented as of August 15, 2014, November 10, 2014, July 8, 2016 and December 15, 2016 (as so supplemented, the “Indenture”). As such, the Company also announced today that as of the Expiration Time the consents delivered in the Invitation exceeded the amount required under the Indenture to approve the adoption of the Amendments. The Amendments will become operative upon completion of the Invitation on the Settlement Date. The Amendments, among other things, will eliminate substantially all of the restrictive covenants and certain events of default currently in the Indenture.

The Invitation and Consent Solicitation represent elements of a comprehensive refinancing of the Company’s outstanding secured and unsecured indebtedness.  In addition to the consummation of the Invitation and Consent Solicitation, the Company expects to consummate the following transactions on or around the Settlement Date (such transactions, collectively, the “Refinancing Transactions”):

  • entry into the credit agreement related to the Borrower’s new first lien credit facilities, which consist of a $700 million term loan credit facility scheduled to mature in April 2024 and a $25 million revolving credit facility scheduled to mature in January 2024;
  • consummation of a private exchange by certain affiliates of certain equity holders of the Company that hold approximately $99.6 million of 9% Senior Secured Second Lien PIK Toggle Notes due 2020 issued by the Borrower (the “Existing Second Lien Notes”), who have agreed to privately exchange their Existing Second Lien Notes for New Second Lien Term Loans, subject to customary closing conditions (the “Second Lien Notes Private Exchange”);
  • funding of approximately $31.9 million of commitments for New Second Lien Term Loans with cash by certain affiliates of certain equity holders of the Company; and
  • entry into the credit agreement governing the approximately $204.6 million of New Second Lien Term Loans.

The Company anticipates that all conditions of the Invitation and the other Refinancing Transactions will be satisfied as of the Settlement Date.

The Borrower expects to repay its existing credit facility on the Settlement Date. The Borrower also expects to redeem its outstanding Existing Second Lien Notes (other than the Existing Second Lien Notes that will be exchanged in the Second Lien Notes Private Exchange), on April 30, 2019 at a price of 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date.

This release is for informational purposes only and is neither an offer to buy or sell nor a solicitation of an offer to buy or sell any securities of the Company or any of its subsidiaries.  The Invitation and Consent Solicitation were only made pursuant to the Information Memorandum and related documents.

Sorenson Communications, LLC

Sorenson Communications, LLC (www.sorenson.com) is a provider of industry-leading communications products and services for the Deaf and hard-of-hearing. The Company’s offerings include SVRS®, the highest-quality video interpreting service; the ntouch® VP and the ntouch VP2 videophones, designed especially for use by Deaf individuals; ntouch PC, software that connects users to SVRS by using a PC and webcam; ntouch for Mac®, software that connects users to SVRS by using an Apple® computer; and ntouch Mobile, an application empowering SVRS communication via tablet and mobile devices. The Company and its subsidiaries and affiliates are unrelated to, and unaffiliated with, Sorenson Media, Inc.

CaptionCall, LLC

CaptionCall, LLC (www.captioncall.com) is another innovative solution from Sorenson Holdings, the worldwide leader in telecommunication relay services. The Company has been offering technology and services for assistive communications since 1995. CaptionCall is a revolutionary phone for anyone experiencing hearing loss that keeps them from using the phone effectively. CaptionCall offers amplification and superb sound quality while displaying smooth-scrolling captions of what callers say on a large, easy-to-read screen. CaptionCall helps people with hearing loss stay socially connected for a longer, happier, healthier life.

Additional Information

The statements included in this release may constitute “forward-looking statements” within the meaning of U.S. federal securities laws. In addition to the assumptions specifically mentioned in the above paragraphs, there are a number of other factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, the Company’s ability to consummate the Invitation on the terms described in this release or at all, the Company’s substantial debt and lease obligations, Video Relay Service and IP Captioned Telephone Service rates, future regulatory actions by the Federal Communications Commission, pending patent litigation and other factors detailed in risk factors and elsewhere in the Information Memorandum, including risk factors incorporated by reference therein. Should one or more of these risks or uncertainties materialize or the consequences of such a development worsen, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise, except as required by law.

For further information, please contact:

Ann Bardsley
Director of Public Relations
Sorenson Holdings, LLC
801-287-9897
abardsley@sorenson.com

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