FairPoint Communications 2004 Annual Report Download - page 94

Proceeds were used to prepay existing debt as follows (dollars in thousands):
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Senior secured notes $182,357 (182,357)—
Senior subordinated notes due 2008:
Fixed rate notes, 9.50% 115,207 (115,207)—
Variable rate notes 75,000 (75,000)—
Senior subordinated notes, 12.50%, due 2010 193,000 (173,076)19,924
Senior notes, 11.875% due 2010 225,000 (222,950)2,050
Senior notes to RTFC:
Fixed rate, 9.20%, due 2009 2,278 — 2,278
Variable rate, due 2009 3,415 (3,415)—
Subordinated promissory notes, due 2005 7,000 (7,000)—
First mortgage notes to Rural Utilities Service, due
2005 to 2016 6,034 (6,034)—
Senior notes to RTB, due 2008 to 2014 1,141 (1,141)—
Total outstanding long-term debt 810,432 (786,180)24,252
Less current portion (524)— (524)
Total long-term debt, net of current portion $809,908 (786,180)23,728
The remaining balance of $19.9 million of the 12.5% notes will be called for redemption in May 2005. The Company paid
$59.3 million in debt tender costs and premiums as a result of the repayments described above.
In conjunction with the refinancing, the Company recorded a write-off of existing debt issuance costs of $17.0 million. Debt
issue and offering costs of $1.4 million remain capitalized that are a direct and incremental benefit to the transactions described
above. The final costs associated with the transactions will be allocated between debt issuance costs and equity proceeds.
Borrowings under the Company's new credit facility bear interest at variable interest rates. In connection with the closing
of the Company's new credit facility, the Company entered into three interest rate swap agreements which fixed the interest
rate on approximately $130.0 million on the term loans under our new credit facility at 6.11% until December 31, 2009, fixed
the interest rate on approximately $130.0 million of the term loans under our new credit facility at 5.98% until December 31,
2008 and fixed the interest rate on approximately $130.0 million of the term loans under our new credit facility at 5.76% until
December 31, 2007. The interest rate swaps qualify as cash flow hedges for accounting purposes.
(c) Redemption of Series A Preferred Stock Subject to Mandatory Redemption
The Company used proceeds of $129.2 million for the redemption of series A preferred stock subject to mandatory
redemption. In addition, the Company paid a premium for the redemption of series A preferred stock totaling $0.2 million,
resulting in a total loss on redemption of $10.4 million.
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