Frontier Communications 2014 Annual Report Download - page 80

On June 2, 2014, the Company entered into a new revolving credit agreement with JPMorgan
Chase Bank, N.A., as administrative agent, the lenders party thereto and the other parties named
therein (the Revolving Credit Agreement), for a $750 million revolving credit facility (the Revolving
Credit Facility) with a scheduled termination date of May 31, 2018 and terminated its existing revolving
credit facility (the Prior Revolving Credit Facility) under the Credit Agreement, dated as of May 3, 2013,
among the Company, JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto
and the other parties named therein (the Prior Revolving Credit Agreement). As of December 31, 2014,
the Revolving Credit Facility was fully available and no borrowings had been made thereunder.
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 0.450% per
annum as of December 31, 2014. 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 1.50% or 2.50%, respectively, as of December 31, 2014. 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 terms of the Revolving Credit Facility are
substantially similar to the terms of the Prior Revolving Credit Facility.
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 million senior unsecured term loan facility
with a final maturity of October 14, 2016 (the 2011 CoBank Credit Agreement). The entire facility was
drawn upon execution of the 2011 CoBank Credit Agreement in October 2011. Repayment of the
outstanding principal balance is made in quarterly installments in the amount of $14 million, which
commenced on March 31, 2012, with the remaining outstanding principal balance to be repaid on the
final maturity date. Borrowings under the 2011 CoBank Credit Agreement bear interest based on the
margins over the Base Rate (as defined in the 2011 CoBank 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 2011 CoBank Credit
Agreement. The current pricing on this facility is LIBOR plus 2.875%.
On September 17, 2014, the Company completed a registered debt offering of $775 million
aggregate principal amount of 6.250% senior unsecured notes due 2021, and $775 million aggregate
principal amount of 6.875% senior unsecured notes due 2025. We received net proceeds, after
deducting underwriting fees, of $1,519 million from the offering. The Company used the net proceeds
from the offering of the notes, together with borrowings under the 2014 CoBank Credit Agreement, as
defined above, and cash on hand, to finance the Connecticut Acquisition, which closed on October 24,
2014. See Note 3 for further discussion of the Connecticut Acquisition.
During 2014, we also entered into secured financings totaling $11 million with four year terms and
no stated interest rate for certain equipment purchases.
On April 10, 2013, the Company completed a registered debt offering of $750 million aggregate
principal amount of 7.625% senior unsecured notes due 2024, issued at a price of 100% of their
principal amount. We received net proceeds of $737 million from the offering after deducting
underwriting fees. The Company used the net proceeds from the sale of the notes, together with cash
on hand, to finance the cash tender offers discussed below.
On April 10, 2013, the Company accepted for purchase $471 million aggregate principal amount of
its senior notes tendered for total consideration of $532 million, consisting of $194 million aggregate
principal amount of the Company’s 6.625% senior notes due 2015 (the March 2015 Notes), tendered
F-19
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements