Frontier Communications 2013 Annual Report Download - page 35

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On April 10, 2013, the Company accepted for purchase $471.3 million aggregate principal amount of its
senior notes tendered for total consideration of $532.4 million, consisting of $194.2 million aggregate principal
amount of the Company’s 6.625% senior notes due 2015 (the March 2015 Notes), tendered for total
consideration of $216.0 million, and $277.1 million aggregate principal amount of the Company’s 7.875%
senior notes due 2015 (the April 2015 Notes), tendered for total consideration of $316.4 million. On April 24,
2013, the Company accepted for purchase $0.7 million aggregate principal amount of the March 2015 Notes,
tendered for total consideration of $0.8 million, $0.8 million of the April 2015 Notes, tendered for total
consideration of $0.9 million, and $225.0 million aggregate principal amount of the Company’s 8.250% senior
notes due 2017 (the 2017 Notes), tendered for total consideration of $267.7 million. The repurchases in the debt
tender offers for the senior notes resulted in a loss on the early extinguishment of debt of $104.9 million ($64.9
million or $0.06 per share after tax), which was recognized in the second quarter of 2013.
Additionally, during the second quarter of 2013, the Company repurchased $208.8 million of the 2017
Notes in a privately negotiated transaction, along with $17.3 million of its 8.125% senior notes due 2018 and
$78.5 million of its 8.500% senior notes due 2020 in open market repurchases. These transactions resulted in a
loss on the early extinguishment of debt of $54.9 million ($34.0 million or $0.04 per share after tax), which
was recognized in the second quarter of 2013.
Pursuant to the 2012 Debt Tender Offer, the Company accepted for purchase $400 million aggregate
principal amount of 2014 Notes, tendered for total consideration of $446.0 million, and $49.5 million aggregate
principal amount of April 2015 Notes, tendered for total consideration of $54.0 million. The Company used
proceeds from the sale of its May 2012 offering of $500.0 million of 9.250% Senior Notes due 2021, plus cash
on hand, to purchase the Notes.
The repurchases in the 2012 Debt Tender Offer for the Notes resulted in a loss on the early extinguishment
of debt of $69.0 million, which we recognized in the second quarter of 2012. We also recognized losses of $2.1
million during the second quarter of 2012 for $78.1 million in total open market repurchases of our 6.25%
Senior Notes due 2013.
On October 1, 2012, the Company accepted for purchase $75.7 million and $59.3 million aggregate
principal amount of the April 2015 Notes and the 2017 Notes, respectively, in open market repurchases for total
consideration of $154.7 million. The repurchases resulted in a loss on the early retirement of debt of $19.3
million ($12.1 million or $0.01 per share after tax) that was recognized in the fourth quarter of 2012.
In 2011, we retired an aggregate principal amount of $552.4 million of debt, consisting of $551.4 million
of senior unsecured debt and $1.0 million of rural utilities service loan contracts.
We may from time to time make additional repurchases of our debt in the open market, through tender
offers, exchanges of debt securities, by exercising rights to call or in privately negotiated transactions. We may
also refinance existing debt or exchange existing debt for newly issued debt obligations. We do not expect the
additional financing of $1.9 billion that will be used for the AT&T Transaction to affect our current refinancing
plans.
Bank Financing
The Company has a credit agreement with CoBank, ACB, as administrative agent, lead arranger and a
lender, and the other lenders party thereto, for a $575.0 million senior unsecured term loan facility with a final
maturity of October 14, 2016 (the Credit Agreement). The entire facility was drawn upon execution of the
Credit Agreement in October 2011. Repayment of the outstanding principal balance is made in quarterly
installments in the amount of $14.4 million, which commenced on March 31, 2012, with the remaining
outstanding principal balance to be repaid on the final maturity date. Borrowings under the Credit Agreement
bear interest based on the margins over the Base Rate (as defined in the Credit Agreement) or LIBOR, at the
election of the Company. Interest rate margins under the facility (ranging from 0.875% to 2.875% for Base
Rate borrowings and 1.875% to 3.875% for LIBOR borrowings) are subject to adjustments based on the Total
Leverage Ratio of the Company, as such term is defined in the Credit Agreement. The current pricing on this
facility is LIBOR plus 2.875%. The proceeds of the facility were used to repay in full the remaining
outstanding principal on three debt facilities (Frontier’s $200 million Rural Telephone Financing Cooperative
34
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES