Cincinnati Bell 2004 Annual Report Download - page 184
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$500 million in future incremental borrowing capacity (in addition to the $250 million in initial borrowing
capacity), which should be sufficient to fully prepay the 16% notes. The Company used the net proceeds of
approximately $345.7 million from the New Bond issues and initial direct borrowings of approximately
$110.0 million from the new revolving credit facility in order to terminate the prior credit facility and pay
financing and other fees associated with the refinancing plan, leaving $140.0 million in additional borrowing
capacity as of the February 16, 2005 date of closing. Additionally, the Company wrote-off approximately
$7.9 million in unamortized deferred financing fees associated with the prior credit facility. As of February 16,
2005, the Company’s subsidiaries that guarantee the credit facility also unconditionally guarantee the New
Bonds, the 7
1
⁄
4
% Senior notes due 2013 and the 8
3
⁄
8
% notes.
Pursuant to a series of transactions in late February and early March 2005, the Company executed
additional fixed-to-floating interest rate swaps with notional amounts of $350 million in order to: (a) hedge the
fair value risk associated with additional fixed coupon debt and (b) re-balance the fixed-to-floating rate mix
with regard to the Company’s capital structure. The New Bonds have fixed interest rates to their maturity. The
interest rate swaps essentially change the fixed rate nature of these bond issues to mimic the floating rates
paid on the prior credit facility.
110