AT&T Wireless 2013 Annual Report Download - page 55

AT&T Inc. | 53
Advances under both agreements would bear interest, at
AT&T’s option, either:
• at a variable annual rate equal to (1) the highest of:
(a) the base (or prime) rate of the bank affiliate of
Citibank, N.A. which is serving as administrative agent
under the Agreement, (b) 0.50% per annum above
the Federal funds rate, and (c) the London Interbank
Offered Rate (LIBOR) applicable to U.S. dollars for a
period of one month plus 1.00% per annum, plus (2)
an applicable margin, as set forth in the Agreement
(Applicable Margin); or
• at a rate equal to: (i) the LIBOR for a period of one,
two, three or six months, as applicable, plus (ii) the
Applicable Margin.
The Applicable Margin for both agreements will equal
0.565%, 0.680%, or 0.910% per annum, depending on
AT&T’s credit rating.
Under each agreement AT&T will pay a facility fee of
0.060%, 0.070% or 0.090% per annum, depending on
AT&T’s credit rating, of the amount of lender commitments.
Both agreements require that, if at any time AT&T or a
subsidiary pledges assets or otherwise permits a lien on its
properties, advances under the agreement will be ratably
secured, subject to specified exceptions. Both agreements
also contain a financial ratio covenant that provides that
AT&T will maintain, as of the last day of each fiscal quarter,
a debt-to-EBITDA (earnings before interest, income taxes,
depreciation and amortization, and other modifications
described in the agreements) ratio of not more than 3.0
to 1, for the four quarters then ended.
Defaults under both agreements permit the lenders to
accelerate required repayment and would increase the
Applicable Margin by 2.00% per annum. Defaults include
noncompliance with the two covenants above, other
representations and warranties and the following:
• We fail to pay principal or interest, or other amounts
under the agreement beyond any grace period.
• We fail to pay when due other debt of $400 or more
that results in acceleration of that debt (commonly
referred to as cross-acceleration) or a creditor
commences enforcement proceedings within a
specified period after a money judgment of $400
or more has become final.
• A person acquires beneficial ownership of more than
50% of AT&T common shares or more than a majority
of AT&T’s directors change in any 24-month period
other than as elected by the remaining directors.
Debt Refinancing
During 2013, we received net proceeds of $12,040,
from the issuance of $12,108 in long-term debt in
various markets, with an average weighted maturity of
approximately 10 years and an average interest rate of
2.6%. We redeemed $7,698 in borrowings, including debt
tender offers covering $5,000 of various notes with stated
rates of 5.20% to 8.75% for $5,556 in cash payments and
early redemptions of $300 and $550 with stated rates of
7.375% and 6.625%, respectively.
As of December 31, 2013 and 2012, we were in compliance
with all covenants and conditions of instruments governing
our debt. Substantially all of our outstanding long-term
debt is unsecured. Maturities of outstanding long-term
notes and debentures, as of December 31, 2013, and the
corresponding weighted-average interest rate scheduled
for repayment are as follows:
There-
2014 2015 2016 2017 2018 after
Debt
repayments1 $5,472 $6,514 $6,667 $5,257 $5,800 $45,790
Weighted-
average
interest rate 4.9% 3.2% 2.7% 2.4% 4.6% 5.1%
1 Debt repayments assume putable debt is redeemed by the holders at the next
opportunity.
Credit Facilities
On December 11, 2013, we amended and extended for
an additional two-year term our existing $5,000 revolving
credit agreement with a syndicate of banks until
December 2018 (December 2018 Facility). We also have
an existing $3,000 revolving credit agreement that was
entered into in 2012, with a syndicate of banks that is
available until December 2017 (December 2017 Facility).
In the event advances are made under either agreement,
those advances would be used for general corporate
purposes. Advances are not conditioned on the absence
of a material adverse change. All advances must be
repaid no later than the date on which lenders are no
longer obligated to make any advances under each
agreement. Under each agreement, we can terminate,
in whole or in part, amounts committed by the lenders
in excess of any outstanding advances; however, we
cannot reinstate any such terminated commitments.
At December 31, 2013, we had no advances outstanding
under either agreement and were in compliance with
all covenants under each agreement.