Cincinnati Bell 2013 Annual Report Download - page 94

•sell assets;
•guarantee indebtedness;
•declare or pay dividends or other distributions to shareholders;
•repurchase equity interests;
•redeem debt that is junior in right of payment to such indebtedness;
•enter into agreements that restrict dividends or other payments from subsidiaries;
•issue or sell capital stock of certain of its subsidiaries; and
•consolidate, merge, or transfer all or substantially all of its assets and the assets of its subsidiaries on a
consolidated basis.
In addition, the Company’s Corporate Credit Agreement and debt instruments include restrictive covenants
that may materially limit the Company’s ability to prepay debt and preferred stock. The agreements governing
the Corporate Credit Agreement also require the Company to achieve and maintain compliance with specified
financial ratios.
The restrictions contained in the terms of the Corporate Credit Agreement and its other debt instruments
could:
•limit the Company’s ability to plan for or react to market conditions or meet capital needs or otherwise
restrict the Company’s activities or business plans; and
•adversely affect the Company’s ability to finance its operations, strategic acquisitions, investments or
alliances, or other capital needs, or to engage in other business activities that would be in its interest.
A breach of any of the debt’s restrictive covenants or the Company’s inability to comply with the required
financial ratios would result in a default under some or all of the debt agreements. During the occurrence and
continuance of a default, lenders may elect to declare all outstanding borrowings, together with accrued interest
and other fees, to be immediately due and payable. Additionally, under the credit facilities, the lenders may elect
not to provide loans until such default is cured or waived. The Company’s debt instruments also contain cross-
acceleration provisions, which generally cause each instrument to be subject to early repayment of outstanding
principal and related interest upon a qualifying acceleration of any other debt instrument. Failure to comply with
these covenants, if not cured or waived, would limit the cash required to fund operations and its general
obligations and could result in the Company’s dissolution, bankruptcy, liquidation, or reorganization.
The Company depends on its Corporate Credit Agreement and Receivables Facility to provide for its short-
term financing requirements in excess of amounts generated by operations, and the availability of those funds
may be reduced or limited.
The Company depends on the revolving credit facility under its Corporate Credit Agreement and
Receivables Facility to provide for temporary financing requirements in excess of amounts generated by
operations.
As of December 31, 2013, the Company had $40.0 million of outstanding borrowings under its Corporate
Credit Agreement, leaving $160.0 million in additional borrowing availability under this facility. The $200
million Corporate Credit Agreement is funded by various financial institutions. If one or more of these banks is
not able to fulfill its funding obligations, the Company’s financial condition would be adversely affected.
The revolving commitments under the Corporate Credit Agreement will be permanently reduced by the
lesser of (i) the amount of net cash proceeds from the first sale by the Company of its equity interests in
CyrusOne or CyrusOne LP and (ii) $50.0 million, provided that such sale occurs by December 31, 2014. If such
sale has not occurred by that date, the original revolving commitments will be permanently reduced to $150.0
million. In addition, the original revolving commitments will be further reduced to $125.0 million on
December 31, 2015.
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Form 10-K Part I Cincinnati Bell Inc.