AT&T Wireless 2014 Annual Report Download - page 59

AT&T INC. | 57
The Applicable Margin for a Eurodollar Rate Advance
under the Tranche B Facility will equal 1.125%, 1.250%
or 1.375% per annum, depending on AT&T’s credit rating.
The Applicable Margin for a Base Rate Advance under the
Tranche B Facility will be equal to the relevant Applicable
Margin for a Eurodollar Rate Advance under the Tranche B
Facility minus 1.00%.
The Syndicated Credit Agreement contains covenants that
are customary for an issuer with an investment grade senior
debt credit rating. Among other things, the Syndicated
Credit Agreement requires us to maintain a debt-to-EBITDA
(earnings before interest, income taxes, depreciation and
amortization, and other modifications described in the
Syndicated Credit Agreement) ratio of not more than
3-to-1, as of the last day of each fiscal quarter.
Events of default are customary for an agreement of this
nature and result in the acceleration or permit the lenders
to accelerate, as applicable, required payment and which
would increase the Applicable Margin by 2.00% per annum.
The 18-Month Credit Agreement
As with the Syndicated Credit Agreement, advances under
the 18-Month Credit Agreement would be used for general
corporate purposes, including acquisition related payments.
Amounts borrowed under the 18-Month Credit Agreement
will be due and payable on the date that is 18 months
after the funding. The obligations of the lender under the
18-Month Credit Agreement to provide advances extend
from the effective date of the agreement to a termination
date of March 21, 2015, unless prior to that date either:
(i) AT&T reduces to $0 the commitment of the lender under
the 18-Month Credit Agreement or (ii) certain events of
default occur.
Advances would bear interest, at AT&T’s option, either:
• at a variable annual rate equal to: (1) the highest of
(a) Mizuho’s publicly-announced prime rate, (b) 0.50%
per annum above the Federal funds rate, and (c) the ICE
Benchmark Administration Limited Settlement Rate
applicable to dollars for a period of one month plus
1.00%, plus (2) an applicable margin, as set forth in
the 18-Month Credit Agreement (Applicable Margin)
(each such Advance, a Base Rate Advance); or
• at a rate equal to: (i) the LIBOR for deposits in dollars
(adjusted upwards to reflect any bank reserve costs)
for a period of one, two, three or six months, as
applicable, plus (ii) the Applicable Margin (each such
Advance, a Eurodollar Rate Advance).
50% of the facility amount may agree to extend their
commitments for two one-year periods beyond the
December 11, 2017, termination date, under certain
circumstances. We also can request the lenders to further
increase their commitments (i.e., raise the available credit)
up to an additional $2,000 provided no event of default
has occurred. The same provisions apply to the
December 2018 Facility except that the applicable
date is December 11, 2018.
The Syndicated Credit Agreement
In the event advances are made under the Syndicated
Credit Agreement, those advances would be used for
general corporate purposes, including acquisition related
payments. Amounts borrowed under the Tranche A Facility
will be due and payable on the third anniversary of funding.
Amounts borrowed under the Tranche B Facility will be
subject to amortization from the third anniversary of
funding, with twenty-five percent of the aggregate principal
amount thereof being payable prior to the fifth anniversary
thereof, and all remaining principal amount due and
payable on such fifth anniversary. The obligations of the
lenders under the Syndicated Credit Agreement to provide
advances extend from the effective date of the agreement
to a termination date of March 21, 2015, unless prior to
that date either: (i) AT&T reduces to $0 the commitments
of the lenders under the Syndicated Credit Agreement or
(ii) certain events of default occur.
Advances would bear interest, at AT&T’s option, either:
• at a variable annual rate equal to: (1) the highest of
(a) Mizuho’s publicly-announced prime rate, (b) 0.50%
per annum above the Federal funds rate, and (c) the ICE
Benchmark Administration Limited Settlement Rate
applicable to dollars for a period of one month plus
1.00%, plus (2) an applicable margin, as set forth in
the Syndicated Credit Agreement (Applicable Margin)
(each such Advance, a Base Rate Advance); or
• at a rate equal to: (i) the LIBOR for deposits in dollars
(adjusted upwards to reflect any bank reserve costs)
for a period of three or six months, as applicable,
plus (ii) the Applicable Margin (each such Advance, a
Eurodollar Rate Advance).
The Applicable Margin for a Eurodollar Rate Advance
under the Tranche A Facility will equal 1.000%, 1.125%
or 1.250% per annum depending on AT&T’s credit rating.
The Applicable Margin for a Base Rate Advance under the
Tranche A Facility will be equal to the relevant Applicable
Margin for a Eurodollar Rate Advance under the Tranche A
Facility minus 1.00%.