8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 1, 2014

Cogent Communications Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-31227	52-2337274
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

1015 31st St. NW, Washington, District of Columbia	20007
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 202-295-4200

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01.  Regulation FD Disclosure.

Cogent Communications Finance, Inc., a newly formed financing subsidiary of Cogent Communications Group, Inc. (“Cogent” or the “Company”), intends to commence an offering of $200 million of senior unsecured notes due 2021 (the “Notes”) for issuance in a private placement not registered under the Securities Act of 1933, as amended (the “Act”).  The offering is expected to close into escrow subject to customary closing conditions.  If the offering is consummated, Cogent expects to use the proceeds from the offering, if released from escrow, for general corporate purposes.  There can be no assurance that the issuance and sale of the Notes will be consummated.  Additional details are discussed in the associated press release, a copy of which is attached as Exhibit 99.1. Additional information regarding certain transactions in connection with the offering, use of proceeds and capitalization are set forth in Exhibit 99.2.

The information in this Current Report does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes. The Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This information set forth herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Caution Concerning Forward-Looking Statements

Except for historical information and discussion contained herein, statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “projects” and similar expressions. The statements in this release are based upon the current beliefs and expectations of Cogent’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Numerous factors could cause or contribute to such differences, including future economic instability in the global economy or a contraction of the capital markets which could affect spending on Internet services and our ability to engage in financing activities; the impact of changing foreign exchange rates (in particular the Euro to USD and Canadian dollar to USD exchange rates) on the translation of our non-USD denominated revenues, expenses, assets and liabilities; legal and operational difficulties in new markets; the imposition of a requirement that we contribute to the U.S. Universal Service Fund and similar funds in other countries; changes in government policy and/or regulation, including net neutrality rules by the United States Federal Communications Commission and in the area of data protection; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering arrangements on favorable terms; our reliance on an equipment vendor, Cisco Systems Inc., and the potential for hardware or software problems associated with such equipment; the dependence of our network on the quality and dependability of third-party fiber providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; and outcomes in litigation as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our annual report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission. Cogent undertakes no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Cogent Communications Group, Inc.
April 1, 2014	By:	/s/David Schaeffer
		Name: David Schaeffer
		Title: Chairman, President & Chief Executive Officer

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Cogent Contacts:
For Public Relations:	For Investor Relations:
Travis Wachter	+ 1 (202) 295-4212
+ 1 (202) 295-4217	investor.relations@cogentco.com
twachter@cogentco.com

Cogent Communications Launches Notes Offering

WASHINGTON, D.C. April 1, 2014 — Today, Cogent Communications Group, Inc. (“Cogent Communications”) announced that Cogent Communications Finance, Inc., a newly formed financing subsidiary of Cogent Communications, intends to commence an offering of $200 million of senior unsecured notes due 2021 (the “Notes”) for issuance in a private placement not registered under the Securities Act of 1933, as amended (the “Act”).  The offering is expected to close into escrow subject to customary closing conditions.  If the offering is consummated, Cogent expects to use the proceeds from the offering, if released from escrow, for general corporate purposes.  There can be no assurance that the issuance and sale of the Notes will be consummated.

The information in this release does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes. The Notes offered have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP, consistently ranked as one of the top five Internet backbone networks in the world.  Cogent specializes in providing businesses with high speed Internet access, Ethernet transport and colocation services.  Cogent’s facilities-based, all-optical IP network provides services in over 180 markets globally.

Since its inception, Cogent has unleashed the benefits of IP technology, building one of the largest and highest capacity IP networks in the world.  This network enables Cogent to offer large bandwidth connections at highly competitive prices.  Cogent also offers superior customer support by virtue of its end-to-end control of service delivery and network monitoring.

Cogent Communications is headquartered at 1015 31st Street, NW, Washington, D.C. 20007. For more information, visit www.cogentco.com. Cogent Communications can be reached in the United States at (202) 295-4200 or via email at info@cogentco.com.

#  #  #

Information in this release may involve expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Cogent Communications Group, Inc. as of the date of the release, and we assume no obligation to update any such forward-looking statement. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Some of the factors and risks associated with our business are discussed in Cogent’s registration statements filed with the Securities and Exchange Commission and in its other reports filed from time to time with the SEC.

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EX-99.2

Exhibit 99.2

The transactions

Cogent Communications Finance, Inc., a newly formed financing subsidiary of Cogent Communications Group, Inc. (“Cogent” or the “Company”), intends to commence an offering of $200 million of senior unsecured notes due 2021 (the “Notes”) for issuance in a private placement not registered under the Securities Act of 1933, as amended.  Cogent’s common stock is listed on Nasdaq under the symbol “CCOI” and the Company has previously issued 8.375% Senior Secured Notes due 2018 (the “Existing Secured Notes”) and 1.00% Convertible Senior Notes due 2027 (the “Existing Convertible Notes”).  Cogent Communications Finance, Inc. (the “Escrow Issuer”) is a newly formed direct subsidiary of the Company.  Cogent Communications Beta, LLC, a Delaware limited liability company (“Cogent Beta”), is a newly formed direct subsidiary of the Company and is a sister company of the Escrow Issuer.  Cogent Communications Alpha, LLC, a Delaware limited liability company (“Cogent Alpha”), is a newly formed direct subsidiary of Cogent Beta.  On March 31, 2014, the Company designated the Escrow Issuer, Cogent Beta and Cogent Alpha as “Unrestricted Subsidiaries” under the indenture governing the Existing Secured Notes (the “Existing Secured Notes Indenture”).   The following describes the transactions that have taken place or are expected to take place in connection with the offering of the Notes:

·The Company has caused its operating subsidiaries to transfer approximately $80.0 million of cash and cash equivalents to Cogent Alpha.  Such transfer was made pursuant to the “builder” basket under the restricted payments covenant in the Existing Secured Notes Indenture and the indenture governing the Notes at a time when the Company’s Consolidated Leverage Ratio (as defined in the Existing Secured Notes Indenture) was less than 4.25 to 1.00.

·The Company will transfer approximately $3.0 million of cash and cash equivalents to the Escrow Issuer, which constitutes an amount sufficient to pay all regularly scheduled interest and accreted OID, if any, that would accrue on the Notes up to, but not including, the date of any special mandatory redemption of the notes.  Such transfer will be made pursuant to the basket for investments in unrestricted subsidiaries under the definition of “Permitted Investments” in the Existing Secured Notes Indenture.

·Upon consummation of the offering of the Notes, the gross proceeds from the offering of the Notes will be deposited into an escrow account and the Escrow Issuer will deposit into such escrow account an amount sufficient to pay all regularly scheduled interest and accreted OID, if any, that would accrue on the Notes up to, but not including, the date of any special mandatory redemption pursuant to an escrow agreement (the “escrow agreement”) to be entered into by the Escrow Issuer, the Company, Wilmington Trust, National Association, as the trustee, and Wilmington Trust, National Association, as the escrow agent (the “escrow agent”) and the release of such escrowed amounts will be subject to certain conditions as described below.

·After launch of the offering of the Notes, the Company expects to issue a notice to the holders of the Existing Convertible Notes that a holding company reorganization transaction (the “Reorganization”) pursuant to Section 251(g) of the General Corporation Law of the State of Delaware will occur.

·The Company expects then to form a subsidiary, Cogent Communications Holdings, Inc. (“Cogent Holdco”) under Delaware law, and to cause Cogent Holdco to form a subsidiary, Cogent Communications Merger Sub, Inc. (“Merger Sub”) under Delaware law.

·Pursuant to the Reorganization, the Company expects to cause Merger Sub to merge with and into the Company (the “Initial Merger”), with the Company

continuing as the surviving corporation.  Upon consummation of the Reorganization, Cogent Holdco will become the entity whose stock is listed on Nasdaq and the boards of directors, officers and governing documents at Cogent Holdco will be the same as those then currently in place at the Company.  This transaction will constitute a “Change of Control” under the Existing Secured Notes Indenture. An adverse change in the ratings for the Existing Secured Notes could result in us being required to make an offer to purchase the Existing Secured Notes.

·After the consummation of the Reorganization, Cogent Holdco will become a guarantor of the Existing Convertible Notes, the Existing Secured Notes and the Notes; provided that Cogent Holdco will not be subject to any covenants under the indenture governing the Existing Convertible Notes (the “Existing Convertible Notes Indenture”), the Existing Secured Notes Indenture and the indenture governing the Notes.

·Cogent Alpha is expected to then merge with and into Cogent Holdco, with Cogent Holdco continuing as the surviving corporation and the Company expects to dissolve Cogent Beta.

·Pursuant to the terms of the Existing Convertible Notes Indenture, the Company expects to call for redemption all of its outstanding Existing Convertible Notes and expects to redeem all such outstanding Existing Convertible Notes on or about June 20, 2014 (the “Redemption Transactions”).

·After consummation of the Redemption Transactions, the Escrow Issuer will merge with and into the Company (the “Final Merger”), with the Company continuing as the surviving corporation.

·At the time of consummation of the Final Merger, the Company will become the Issuer of the Notes.  In addition, Cogent Holdco and all the domestic subsidiaries of the Company that guarantee the Existing Secured Notes will guarantee the obligations of the Company under the Notes and the related indenture; provided that Cogent Holdco will not be subject to any covenants under the indenture governing the Notes. One of the conditions to the release of the proceeds from the offering in the escrow account to the Company is the assumption of all obligations under the Notes and the indenture by the Company. Upon the Company’s assumption of the Notes, the Notes will be the senior unsecured obligations of the Company.

We refer to the offering of the Notes, the formation of, and investments made in, our unrestricted subsidiaries, the Reorganization, the Redemption Transactions, the Mergers, the Company’s assumption of the Notes, the performance of our obligations under the escrow agreement, the payment of fees, costs and expenses related to the foregoing and the other transactions described above as the “Transactions.”  After giving effect to the Transactions, (i) Cogent Holdco will have approximately $80.0 million of cash and cash equivalents and it will be a guarantor of the Existing Secured Notes and the Notes but will not be subject to the covenants under the Existing Secured Notes Indenture and the indenture governing the Notes, (ii) the “builder” basket under the restricted payments covenant in the Existing Secured Notes Indenture and the indenture governing the Notes will be approximately zero; however, the Company will have approximately $150.0 million of “general” restricted payment capacity under the “general” restricted payment basket of such covenant and (iii) the Consolidated Leverage Ratio under the Existing Secured Notes Indenture and the indenture governing the Notes will exceed 4.25 to 1.00 and is expected to be almost 5.00 to 1.00.  Because Cogent is approaching these limits, Cogent will not be able to make certain

expenditures that might be beneficial to Cogent and Cogent’s ability to incur additional debt may limit its options in ways that could be disadvantageous to it. We expect that Cogent Holdco will use the funds described above for general corporate purposes.

This report does not constitute notice to the holders of the Existing Convertible Notes that any of the Transactions will occur.

Corporate structure

The following chart summarizes Cogent’s corporate structure and principal indebtedness as of today prior to giving effect to any of the Transactions (other than the transfer of approximately $80.0 million of cash and cash equivalents from the Company to Cogent Alpha). This chart is provided for illustrative purposes only and does not represent all legal entities affiliated with, or all obligations of, the issuer:

(1)  As of December 31, 2013, the Company had $92.0 million of Existing Convertible Notes outstanding and $240.0 million of Existing Secured Notes outstanding.  The Company has transferred approximately $80.0 million of cash and cash equivalents to Cogent Alpha.

(2)  Cogent Beta has been designated by the Company as an “Unrestricted Subsidiary” under the Existing Secured Notes Indenture.

(3) Cogent Alpha has been designated by the Company as an “Unrestricted Subsidiary” under the Existing Secured Notes Indenture.  Cogent Alpha has approximately $80.0 million of cash and cash equivalents that was transferred from the Company to it.

(4) The Existing Secured Notes are jointly and severally guaranteed on a senior secured basis by each of our existing domestic and future material domestic subsidiaries.

(5) The Company expects to transfer $3.0 million of cash and cash equivalents to the Escrow Issuer so that the Escrow Issuer may deposit into the escrow account an amount sufficient to pay all regularly scheduled interest and accreted OID, if any, that would accrue on the notes up to, but not including, the date of any special mandatory redemption.  The Escrow Issuer expects to merge with and into the Company after consummation of the Reorganization and the Redemption Transactions.

(6) The Company expects to form Cogent Holdco after consummation of the Notes offering.

(7) The Company expects to form Merger Sub after consummation of the Notes offering.

The following chart summarizes Cogent’s corporate structure and principal indebtedness after giving effect to the Transactions. This chart is provided for illustrative purposes only and does not represent all legal entities affiliated with, or all obligations of, the issuer:

(1)  Upon consummation of the Transactions, Cogent Holdco will be the parent of the Company and all its subsidiaries and will be the issuer of the Company’s publicly traded common stock, and Cogent Holdco will guarantee the Existing Secured Notes and the Notes.  Upon the merger of Cogent Alpha with and into Cogent Holdco, with Cogent Holdco continuing as the surviving corporation, Cogent Holdco will have $80.0 million of cash and cash equivalents.

(2)  Upon consummation of the merger of the Escrow Issuer with and into the Company, with the Company continuing as the surviving corporation, the Company will be the issuer of $240.0 million of Existing Secured Notes and $200.0 million of the Notes.  The transfer by the Company of approximately $3.0 million to the Escrow Issuer, which the Escrow Issuer will use to deposit into the escrow account, constitutes an investment in an unrestricted subsidiary under the Existing Secured Notes Indenture; however, such investment will be returned to the Company upon the merger of the Escrow Issuer with and into the Company. After giving effect to the Transactions, the “builder” basket under the restricted payments covenant in the Existing Secured Notes Indenture and the indenture governing the Notes will be zero; however, the Company will have $150.0 million of “general” restricted payment capacity under the “general” restricted payment basket of such covenant.

(3) The Existing Secured Notes are jointly and severally guaranteed on a senior secured basis by each of our existing domestic and future material domestic subsidiaries. The Notes will be jointly and severally guaranteed on a senior unsecured basis by each of our existing domestic and future material domestic subsidiaries.

Use of proceeds

Cogent estimates that the net proceeds from the offering, after deducting discounts and commissions and estimated expenses relating to the Notes offering of approximately $4.0 million, will be approximately $196.0 million. The gross proceeds from the consummation of the offering will be deposited into the escrow account.  Upon release of the proceeds from the escrow account to the Company, Cogent expects to apply the net proceeds from the offering to general corporate purposes.

Capitalization

The following table sets forth our consolidated capitalization as of December 31, 2013:

·on an actual basis for the Company and its subsidiaries; and

·on an as adjusted basis for Cogent Holdco and its subsidiaries after giving effect to the Transactions as if they had occurred on December 31, 2013.

	As of December 31, 2013
	Actual		As Adjusted
	(unaudited) (in thousands)
Cash and cash equivalents (1)	$	304,866	$	408,888
Debt (including current maturities):
Existing Convertible Notes, at par (2)	91,978		—
Existing Secured Notes, at par (3)	240,000		240,000
Notes(4)	—		200,000
Capital leases	161,779		161,779
Total long-term debt, including current portion	493,757		601,779
Total stockholders’ equity(5)	193,492		190,393
Total capitalization	$	687,249	$	792,172

(1)On an as adjusted basis includes approximately $80.0 million of cash and cash equivalents held at Cogent Holdco.  We may use the proceeds from the offering of notes for general corporate purposes.

(2)Our Chief Executive Officer, Dave Schaeffer, owns $3 million face amount of the Existing Convertible Notes that were purchased from third parties after issuance.

(3)Consists of $240.0 million aggregate principal amount of 8.375% Senior Secured Notes due 2018.

(4)Reflects aggregate principal amount of the Notes.

(5)On an as adjusted basis, includes approximately $80 million of cash and cash equivalents held at Cogent Holdco.