Cincinnati Bell 2012 Annual Report Download - page 166

CyrusOne pays commitment fees for the unused amount of borrowings on the CyrusOne Credit Agreement
and letter of credit fees on any outstanding letters of credit. The commitment fees are equal to 0.50% of the
actual daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving
loans and letter of credit obligations. Commitment fees related to the CyrusOne Credit Agreement were
immaterial in 2012.
Accounts Receivable Securitization Facility
Cincinnati Bell Inc. and certain of its subsidiaries have an accounts receivable securitization facility
(“Receivables Facility”), which permits maximum borrowings of up to $105.0 million as of December 31, 2012.
CBT, CBET, Cincinnati Bell Wireless, LLC (“CBW”), Cincinnati Bell Any Distance Inc. (“CBAD”), Cincinnati
Bell Any Distance of Virginia LLC, CBTS, and eVolve Business Solutions LLC (“eVolve”) all participate in this
facility. The available borrowing capacity is calculated monthly based on the quantity and quality of outstanding
accounts receivable and thus may be lower than the maximum borrowing limit. At December 31, 2012, the
available borrowing capacity was $90.6 million. On October 1, 2012, the Company and CBF amended the
Receivables Facility to remove CyrusOne as an originator and to remove the CyrusOne receivables from the
financing provided under the Receivables Facility.
The transferors sell their respective trade receivables on a continuous basis to CBF, a wholly-owned limited
liability company. In turn, CBF grants, without recourse, a senior undivided interest in the pooled receivables to
various purchasers, including commercial paper conduits, in exchange for cash while maintaining a subordinated
undivided interest in the form of over-collateralization in the pooled receivables. The transferors have agreed to
continue servicing the receivables for CBF at market rates; accordingly, no servicing asset or liability has been
recorded. The Receivables Facility is subject to bank renewal every 364 days, and in any event expires in June
2014. In the event the Receivables Facility is not renewed, management believes it would be able to refinance
any outstanding borrowings under the Corporate Credit Agreement.
Although CBF is a wholly-owned consolidated subsidiary of the Company, CBF is legally separate from the
Company and each of the Company’s other subsidiaries. Upon and after the sale or contribution of the accounts
receivable to CBF, such accounts receivable are legally assets of CBF, and, as such, are not available to creditors
of other subsidiaries or the parent company.
For the purposes of consolidated financial reporting, the Receivables Facility is accounted for as a secured
financing. Because CBF has the ability to prepay the Receivables Facility at any time by making a cash payment
and effectively repurchasing the receivables transferred pursuant to the facility, the transfers do not qualify for
“sale” treatment on a consolidated basis under ASC 860, “Transfers and Servicing.”
At December 31, 2012, the Company had $52.0 million of borrowings and $6.3 million letters of credit
outstanding on this facility, leaving $32.3 million remaining on the available borrowing capacity of $90.6
million. A portion of interest on the Receivables Facility is based on the commercial paper rate plus 1.10%, and
the remaining portion of interest on the Receivables Facility is based on the LIBOR rate plus 1.10%. There were
nominal borrowings and repayments on the Receivables Facility in 2011. The average interest rate on the
Receivables Facility was 1.4% in 2012. The Company pays commitment fees for the unused amount of
borrowings on the securitization facility, and letter of credit fees on this facility. These fees were $0.7 million in
2012 and 2011, and $0.6 million in 2010.
8
1
⁄ 4 % Senior Notes due 2017
In October 2009, the Company issued $500 million of 8
1
⁄ 4 % Senior Notes due 2017 (“8
1
⁄ 4 % Senior Notes”).
Net proceeds of $492.8 million after debt discount, were used to redeem the outstanding 7
1
⁄ 4 % Senior Notes due
2013 of $439.9 million plus accrued and unpaid interest, related call premium, and for general corporate
purposes, including the repayment of other debt. The 8
1
⁄ 4 % Senior Notes are fixed rate bonds to maturity.
Interest on the 8
1
⁄ 4 % Senior Notes is payable semi-annually in cash in arrears on April 15 and October 15 of
each year, commencing April 15, 2010. The 8
1
⁄ 4 % Senior Notes are unsecured senior obligations ranking
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Form 10-K Part II Cincinnati Bell Inc.