Cebridge Closes $350 Million Debt Offering and $125 Million Equity Commitment; Funding Refinances Debt and Provides Acquisition `War Chest'.

Business Editors/High-Tech Writers

ST. LOUIS--(BUSINESS WIRE)--Feb. 24, 2004

Cebridge Connections announced today that it has obtained commitments for up to $125 million in new equity and refinanced its debt with $350 million in new senior secured credit facilities.

The equity commitments come primarily from Goldman Sachs Capital Partners. Oaktree Capital Management, LLC - a Los Angeles-based money management firm - remains Cebridge's controlling shareholder.

The debt and equity raised by Cebridge will be used to refinance all of its existing indebtedness; upgrade its technology; enhance broadband services; and fund additional acquisitions.

Cebridge currently serves more than 420,000 customers in 15 states, excluding three pending acquisitions, which could vault the company to approximately 500,000 customers - making it the nation's eleventh largest multiple system operator (MSO), according to current online rankings published by the National Cable & Telecommunications Association (NCTA).

The debt refinancing - syndicated by Goldman Sachs Credit Partners L.P. and RBC Capital Markets - gives Cebridge's management team greater financial and operational flexibility than was available to them under prior loans. While specific terms were not disclosed, company officials said the credit facilities were significantly over-subscribed, prompting them to increase the $325 million they originally sought.

"The market has re-affirmed the value of our broadband systems, its support for our growth plans, and the talent and vision of our management team," said Jerry Kent, Cebridge's chief executive officer. "We now have the balance sheet and flexibility we need to invest in our infrastructure and develop a strong, competitive broadband enterprise."

Cebridge Connections was formed last year after Oaktree partnered with Cequel III, LLC - a St. Louis-based cable and telecommunications management firm - to assume leadership of the post-bankruptcy assets of Classic Communications, Inc., and later, to acquire several suburban Houston cable systems from Shaw Communications, Inc.

In January this year, the companies closed on the acquisition of approximately 78,000 customers from Alliance Communications Partners, LP, and entered an agreement to acquire up to 13,000 customers from Thompson Cablevision.

"From day one, we knew there was a real opportunity here," Kent said. "The markets we serve - a blend of smaller towns plus a number of robust and growing suburban communities - are as hungry for advanced broadband services as their urban counterparts. But the customers of these systems have been largely ignored: in fact, about eight out of ten of them have previously had no viable alternative for residential broadband service. Thus, by upgrading these systems to deliver high-speed Internet, digital tiers, cable telephony, and more - we are answering an unmet need and, in the process, setting ourselves up to meet and exceed our objectives."

Kent said Cebridge has already upgraded roughly half of the original Classic systems and will continue to upgrade systems this year - with the near-term goal of making high-speed Internet service (HSD) available to more than 80 percent of the combined company's customers. Last year, upgrades and new service launches helped the company double its number of HSD customers - from approximately 20,000 to 40,000 - a figure they reasonably expect to double again in 2004. In addition - where systems have been upgraded to provide HSD - Cebridge has seen lower churn rates and net growth trends.

"Last year, we were very pleased to attract a world-class management team that was willing to tackle the unique challenges and opportunities presented by the Cebridge systems," said Stephen A. Kaplan, a principal of Oaktree Capital Management and former chairman of the board of directors of Cebridge. "Today, we are equally delighted that this management team has secured the appropriate financial structure and level of resources it needs to make our cable systems competitive and highly successful."