Time Warner Cable 2008 Annual Report Download - page 120

$138 million in commitments under the 2008 Bridge Facility, and, therefore, the Company has included only
$1.932 billion of commitments under the 2008 Bridge Facility in its unused committed capacity as of December 31,
2008. In the event the Company borrows any amounts under the 2008 Bridge Facility, subject to certain limited
exceptions, the Company is required to use the net cash proceeds from any subsequent incurrence of debt (other than
an incurrence of debt under the Revolving Credit Facility and its existing commercial paper program), issuance of
equity securities and asset sale to prepay amounts outstanding under the 2008 Bridge Facility. The Company may
prepay amounts outstanding under the 2008 Bridge Facility at any time without penalty or premium, subject to
minimum amounts. TWC may not borrow any amounts under the 2008 Bridge Facility unless and until the Special
Dividend is declared.
Amounts outstanding under the 2008 Bridge Facility will bear interest at a rate equal to LIBOR plus an
applicable margin based on the Company’s credit rating, which margin, at the time of the Separation, is expected to
be 100 basis points. In addition, the per annum interest rate under the 2008 Bridge Facility will increase by 25 basis
points every six months until all amounts outstanding under the 2008 Bridge Facility are repaid.
The 2008 Bridge Facility contains a maximum leverage ratio covenant of 5.0 times the consolidated EBITDA
(as defined in the credit agreement) of TWC. The 2008 Bridge Facility also contains conditions, covenants,
representations and warranties and events of default substantially identical to those contained in the Term Facility.
The financial institutions’ commitments to fund borrowings under the 2008 Bridge Facility will expire upon
the earliest of (i) May 19, 2009, (ii) the date on which the Separation Agreement is terminated in accordance with its
terms or (iii) the completion of the Separation.
Lending Commitments under the Revolving Credit Facility and the 2008 Bridge Facility
The 2008 Bridge Facility consists of commitments of approximately $138 million from each of 14 institutions,
consisting of affiliates of Bank of America, N.A., The Bank of Tokyo-Mitsubishi UFJ, LTD., Barclays Bank Plc,
BNP Paribas Securities Corp., Citibank, N.A., Deutsche Bank AG, Fortis Bank SA/NV, Goldman Sachs Bank USA,
Mizuho Corporate Bank, LTD., Morgan Stanley Bank, The Royal Bank of Scotland PLC, Sumitomo Mitsui
Banking Corporation, UBS Loan Finance LLC and Wachovia Bank, National Association. These same financial
institutions also comprise approximately 70% of the commitments under the Revolving Credit Facility. Recently, a
number of these lenders have entered into agreements to acquire or to be acquired by other financial institutions.
TWC believes that these transactions will not adversely affect the commitments under the 2008 Bridge Facility or
the Revolving Credit Facility. The Company’s bank credit agreements do not contain borrowing restrictions due to
material adverse changes in the Company’s business or market disruption.
In addition, Lehman Brothers Commercial Bank (“LBCB”) and Lehman Brothers Bank, FSB (“LBB”),
subsidiaries of Lehman Brothers Holdings Inc. (“Lehman”), are lenders under the 2008 Bridge Facility and the
Revolving Credit Facility, respectively, with undrawn commitments of $138 million and $125 million, respectively,
as of December 31, 2008. On September 15, 2008, Lehman filed a petition under Chapter 11 of the U.S. Bankruptcy
Code with the U.S. Bankruptcy Court for the Southern District of New York (the “Lehman Bankruptcy”). TWC has
not requested to borrow under either the 2008 Bridge Facility or the Revolving Credit Facility since the Lehman
Bankruptcy, and neither LBCB nor LBB has been placed in receivership or a similar proceeding as of February 19,
2009. While the Company believes that LBCB and LBB are contractually obligated under the 2008 Bridge Facility
and the Revolving Credit Facility, respectively, the Company does not expect that LBCB and LBB will fund any
future borrowing requests and is uncertain as to whether another lender might assume either commitment.
Accordingly, the Company’s unused committed capacity as of December 31, 2008 excludes the undrawn com-
mitments of LBCB and LBB. The Company believes that it continues to have sufficient liquidity to meet its needs
for the foreseeable future, including payment of the Special Dividend, even if LBCB and/or LBB fails to fund its
portion of any future borrowing requests.
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)