Frontier Communications 2013 Annual Report Download - page 36

term loan maturing October 24, 2011, its $143 million CoBank term loan maturing December 31, 2012, and its
$130 million CoBank term loan maturing December 31, 2013) and the remaining proceeds were used for
general corporate purposes.
Revolving Credit Facility
On May 3, 2013, the Company entered into a new $750.0 million revolving credit facility (the Revolving
Credit Facility) and terminated the Company’s previously existing revolving credit facility. As of December 31,
2013, no borrowings had been made under the Revolving Credit Facility. The terms of the Revolving Credit
Facility are set forth in the credit agreement, dated as of May 3, 2013, among the Company, the Lenders party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the Revolving Credit Agreement).
Associated commitment fees under the Revolving Credit Facility will vary from time to time depending on the
Company’s debt rating (as defined in the Revolving Credit Agreement) and were 0.400% per annum as of
December 31, 2013. The Revolving Credit Facility is scheduled to terminate on November 3, 2016. During the
term of the Revolving Credit Facility, the Company may borrow, repay and reborrow funds, and may obtain
letters of credit, subject to customary borrowing conditions. Loans under the Revolving Credit Facility will bear
interest based on the alternate base rate or the adjusted LIBO Rate (each as determined in the Revolving Credit
Agreement), at the Company’s election, plus a margin based on the Company’s debt rating (ranging from
0.50% to 1.50% for alternate base rate borrowings and 1.50% to 2.50% for adjusted LIBO Rate borrowings).
The current pricing on this facility would have been 1.0% or 2.0%, respectively, as of December 31, 2013.
Letters of credit issued under the Revolving Credit Facility will also be subject to fees that vary depending on
the Company’s debt rating. The Revolving Credit Facility is available for general corporate purposes but may
not be used to fund dividend payments. The maximum permitted leverage ratio is 4.5 to 1.
Letter of Credit Facility
On September 8, 2010, the Company entered into a letter of credit facility, the terms of which are set forth
in a Credit Agreement with the Lenders party thereto, and Deutsche Bank AG, New York Branch (the Bank),
as Administrative Agent and Issuing Bank (the Letter of Credit Agreement). An initial letter of credit for
$190.0 million was issued to the West Virginia Public Service Commission to guarantee certain of our capital
investment commitments in West Virginia in connection with the 2010 Transaction. The initial commitments
under the Letter of Credit Agreement expired in September 2011, with the Bank exercising its option to extend
$100.0 million of the commitments to September 2012. In September 2012, the Company entered into an
amendment to the Letter of Credit Agreement to extend $40 million of the commitments. Two letters of credit
were issued in September 2012, one for $20 million that expired in March 2013, and the other for $20 million
that expired in September 2013. The Letter of Credit Agreement expired on September 20, 2013.
Bridge Facility
On December 16, 2013, we signed a commitment letter for a bridge loan facility (the Bridge Facility) and
recognized interest expense of $1.3 million related to this commitment during 2013. On January 29, 2014, we
entered into a bridge loan agreement with the Lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (the Bridge Loan Agreement), pursuant to which the Lenders have agreed at closing of the
AT&T Transaction to provide to us an unsecured bridge loan facility for up to $1.9 billion for the purposes of
funding (i) substantially all of the purchase price for the AT&T Transaction and (ii) the fees and expenses
incurred in connection with the transactions contemplated by the stock purchase agreement for the AT&T
Transaction. Pursuant to the Bridge Loan Agreement, if and to the extent we do not, or are unable to, issue debt
securities yielding up to $1.9 billion in gross cash proceeds on or prior to the closing of the AT&T Transaction,
we shall draw down up to $1.9 billion, less the amount of the debt securities, if any, issued by us on or prior to
the closing of the AT&T Transaction, in aggregate principal amount of loans under the Bridge Facility to fund
the purchase price of the AT&T Transaction.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES