Gogo, which provides broadband connectivity products and services for aviation, has completed private offerings of $925 million 9.875% senior secured notes due 2024 by its direct wholly owned subsidiary, Gogo Intermediate Holdings, and its indirect wholly owned subsidiary, Gogo Finance.
"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, Gogo has: received funds sufficient to repay the remaining $162 million of convertible notes due March 2020; reduced the interest rate on its senior secured debt from 12.5% to 9.875% while extending the maturity by two years to 2024; received 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; and has the flexibility to enter into a $30 million revolving line of credit with an additional $30 million available based on future performance and leverage covenants.
Gogo also does not anticipate requiring additional capital based on its current plans and projected cash flow trajectory, except as needed to refinance its debt obligations maturing in 2022 and 2024.