(Bloomberg) -- Brightspeed, a telecommunications firm owned by Apollo Global Management Inc., plans to line up $1.65 billion of additional financing to upgrade its fiber optic network, according to people with knowledge of the matter.
The proposed injection would be structured as a first-out, first-lien bond, said the people, who asked not to be identified discussing a private matter. The incremental debt would carry a 10.5% coupon with a 2031 maturity, they added. The bond has been upsized twice from an initial target of $500 million in light of investor demand.
A representative for Apollo declined to comment. Messages left with Brightspeed were not returned.
The new financing would mark a turnaround for Brightspeed, which restructured its debt a year ago. Last August, it inked such a deal with a group of banks that were saddled with billions of Brightspeed debt after a failed syndication effort.
As part of the restructuring, the lenders agreed to take a haircut on their debt, while the company received $3.7 billion in new capital. Brightspeed has multiple tranches of debt, including a fourth-out term loan. Since then, Brightspeed has tapped incremental capital raises, bringing its debt load to around $9 billion. That figure doesn't include the proposed bond offering, said the people.
Assuming the deal gets done, the company's net leverage would stay at 15.4 times its adjusted earnings before interest, taxes, depreciation and amortization after netting out cash, said the people.
Brightspeed also intends to access the fiber securitization market beginning in 2026, while it plans to invest around $3.4 billion in capital expenditures over the next five years to support its fiber build, the people said.
Charlotte-based Brightspeed provides broadband and telecommunications services to more than 2 million locations across 20 states, according to an April statement. The company now outlined a goal of reaching 5 million homes and businesses, after setting an original goal for 4 million locations.
--With assistance from Gowri Gurumurthy.
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