Cincinnati Bell 2012 Annual Report Download - page 164

Corporate Credit Agreement
On November 20, 2012, the Company entered into a new corporate credit agreement (“Corporate Credit
Agreement”) which provides for a $200 million revolving credit facility, with a sublimit of $30 million for letters
of credit and a $25 million sublimit for swingline loans. The Corporate Credit Agreement has a maturity date of
July 15, 2017. Borrowings under the Corporate Credit Agreement will be used to provide ongoing working
capital and for other general corporate purposes of the Company. Upon issuance of the Corporate Credit
Agreement, the Company’s former revolving credit facility was terminated. Availability under the new revolving
credit facility is subject to customary borrowing conditions.
Borrowings under the Corporate Credit Agreement bear interest, at the Company’s election, at a rate per
annum equal to (i) LIBOR plus the applicable margin or (ii) the base rate plus the applicable margin. The
applicable margin for advances under the revolving facility is based on certain financial ratios and ranges
between 3.50% and 4.25% for LIBOR rate advances and 2.50% and 3.25% for base rate advances. As of
December 31, 2012, the applicable margin was 4.25% for LIBOR rate advances and 3.25% for base rate
advances. Base rate is the higher of (i) the bank prime rate, (ii) the one-month LIBOR rate plus 1.00% and
(iii) the federal funds rate plus 0.5%.
The original revolving commitments under the Corporate Credit Agreement will be permanently reduced by
the lesser of (i) the amount of net cash proceeds from the first sale by the Company of its equity interests in
CyrusOne or CyrusOne LP to occur after the IPO of common stock of CyrusOne and (ii) $50 million, provided
that such sale occurs by December 31, 2014. If such sale has not occurred by that date, the original revolving
commitments will be permanently reduced to $150 million. In addition, the original revolving commitments will
be further reduced to $125 million on December 31, 2015.
The Company is required to use 100% of the net cash proceeds of sales (other than certain excluded
dispositions) of property and assets, firstly, to prepay outstanding loans under the Corporate Credit Agreement
and secondly, at the Company’s election, to prepay outstanding indebtedness that is eligible for prepayment or
redemption at a fixed price under the terms of the documentation governing such indebtedness or to make
contributions to underfunded pensions plans, subject to, in the case of sales other than sales of the Company’s
equity interests in CyrusOne and CyrusOne LP, customary reinvestment rights and an exception for the first $25
million of such proceeds in each fiscal year. The Company is subject to a similar requirement in the event of
casualty or condemnation of property and assets. Voluntary prepayments of the Corporate Credit Agreement will
be permitted at any time without prepayment penalty, other than breakage and redeployment costs in the case of
prepayment of LIBOR rate loans.
All existing and future subsidiaries of the Company (other than Cincinnati Bell Telephone Company LLC,
Cincinnati Bell Funding LLC (and any other similar special purpose receivables financing subsidiary), Cincinnati
Bell Shared Services LLC, Cincinnati Bell Extended Territories LLC, CBMSM Inc. and its direct and indirect
subsidiaries, and the Company’s joint ventures, subsidiaries prohibited by applicable law from becoming
guarantors and foreign subsidiaries) are required to guarantee borrowings under the Corporate Credit Agreement.
Debt outstanding under the Corporate Credit Agreement is secured by perfected first priority pledges of and
security interests in (i) substantially all of the equity interests of the Company’s U.S. subsidiaries (other than
subsidiaries of non-guarantors of the Corporate Credit Agreement) and 66% of the equity interests in the first-tier
foreign subsidiaries held by the Company and the guarantors under the Corporate Credit Agreement, (ii) certain
personal property and intellectual property of the Company and its subsidiaries (other than that of non-guarantors
of the Corporate Credit Agreement and certain other excluded property) and (iii) the Company’s equity interests
in CyrusOne and CyrusOne LP, both of which, together with their respective subsidiaries, are treated as non-
subsidiaries of the Company and are not guarantors for purposes of the Corporate Credit Agreement.
The Corporate Credit Agreement contains financial covenants that require the Company to maintain certain
leverage and interest coverage ratios and comply with annual limitations on capital expenditures. The Corporate
Credit Agreement contains customary affirmative and negative covenants including, but not limited to,
restrictions on the Company’s ability to incur additional indebtedness, create liens, pay dividends, make certain
investments, prepay other indebtedness, sell, transfer, lease, or dispose of assets and enter into, or undertake,
certain liquidations, mergers, consolidations or acquisitions.
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Form 10-K Part II Cincinnati Bell Inc.