AT&T Wireless 2015 Annual Report Download - page 63

AT&T INC. | 61
event shall the total amount of the lender’s commitments at
any time exceed $14,000. At December 31, 2015, we had no
advances outstanding under the Revolving Credit Agreement
and we have complied will all covenants.
The obligations of the lenders to provide advances will
terminate on December 11, 2020, unless prior to that
date either: (i) AT&T reduces to $0 the commitments of
the lenders, or (ii) certain events of default occur. We and
lenders representing more than 50% of the facility amount
may agree to extend their commitments for two one-year
periods beyond the December 11, 2020, termination date,
under certain circumstances.
Advances under the Revolving Credit Agreement would bear
interest, at AT&T’s option, either:
• at a variable annual rate equal to (1) the highest of:
(a) the base 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 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 Revolving
Credit Agreement (“Applicable Margin for Base
Advances”); or
• at a rate equal to: (i) LIBOR for a period of one, two,
three or six months, as applicable, plus (ii) the
Applicable Margin (“Applicable Margin for Eurocurrency
Rate Advances”).
The Applicable Margin for Eurocurrency Rate Advances
will equal 0.680%, 0.910%, 1.025%, or 1.125% per annum,
depending on AT&T’s credit rating. The Applicable Margin
for Base Rate Advances will be equal to the greater of
0.00% and the relevant Applicable Margin for Eurocurrency
Rate Advances minus 1.00% per annum depending on
AT&T’s credit rating.
We will pay a facility fee of 0.070%, 0.090%, 0.100% or
0.125% per annum, depending on AT&T’s credit rating, of
the amount of lender commitments.
The Revolving Credit Agreement contains covenants that
are customary for an issuer with an investment grade
senior debt credit rating, as well as a net debt-to-EBITDA
(earnings before interest, taxes, depreciation and
amortization, and other modifications described in the
Revolving Credit Agreement) financial ratio covenant that
AT&T will maintain, as of the last day of each fiscal quarter,
a ratio of not more than 3.5-to-1.
The Syndicated Credit Agreement
In March 2015, AT&T borrowed all amounts available under
the Tranche A Facility and the Tranche B Facility. Amounts
borrowed under the Tranche A Facility will be due on
March 2, 2018. Amounts borrowed under the Tranche B
Facility will be subject to amortization from March 2, 2018,
with 25 percent of the aggregate principal amount thereof
being payable prior to March 2, 2020, and all remaining
principal amount due on March 2, 2020.
Advances bear interest 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 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 under the Tranche B Facility
will equal 1.125%, 1.250% or 1.375% per annum,
depending on AT&T’s credit rating.
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
net 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 3.5-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
In March 2015, AT&T borrowed all amounts available under
the 18-Month Credit Agreement. Amounts borrowed under
the 18-Month Credit Agreement will be due and payable on
September 2, 2016. In September 2015, we partially repaid
the amount borrowed.
Advances bear interest 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). The Applicable Margin
will equal 0.800%, 0.900% or 1.000% per annum, depending
on AT&T’s credit rating. In the event that AT&T’s unsecured
senior long-term debt ratings are split by S&P, Moody’s and
Fitch, then the Applicable Margin will be determined by the
highest rating, unless the lowest of such ratings is more
than one level below the highest of such ratings, in which
case the pricing will be the rating that is one level above
the lowest of such ratings.
The 18-Month Credit Agreement contains affirmative and
negative covenants and events of default equivalent to
those contained in the Syndicated Credit Agreement.