Cincinnati Bell 2012 Annual Report Download - page 167

Form 10-K Part II Cincinnati Bell Inc.
equally with all existing and future senior debt and ranking senior to all existing and future senior subordinated
indebtedness and subordinated indebtedness. Each of the Company’s current and future subsidiaries that is a
guarantor under the Corporate Credit Agreement is also a guarantor of the 8
1
⁄ 4 % Senior Notes on an unsecured
senior basis, with certain immaterial exceptions. The indenture governing the 8
1
⁄ 4 % Senior Notes contains
covenants including but not limited to the following: limitations on dividends to shareowners and other restricted
payments; dividend and other payment restrictions affecting the Company’s subsidiaries such that the
subsidiaries are not permitted to enter into an agreement that would limit their ability to make dividend payments
to the parent; issuance of indebtedness; asset dispositions; transactions with affiliates; liens; investments;
issuances and sales of capital stock of subsidiaries; and redemption of debt that is junior in right of payment. The
indenture governing the 8
1
⁄ 4 % Senior Notes provides for customary events of default, including for nonpayment
at final maturity and for a default of any other existing debt instrument that exceeds $35 million.
The Company may redeem the 8
1
⁄ 4 % Senior Notes for a redemption price of 104.125%, 102.063%, and
100.000% on or after October 15, 2013, 2014, and 2015, respectively. At any time prior to October 15, 2013, the
Company may redeem all or part of the 8
1
⁄ 4 % Senior Notes at a redemption price equal to the sum of (1) 100% of
the principal, plus (2) the greater of (a) 1% of the face value of the 8
1
⁄ 4 % Senior Notes or (b) the excess over the
principal amount of the sum of the present values of (i) 104.125% of the face value of the 8
1
⁄ 4 % Senior Notes,
and (ii) interest payments due from the date of redemption to October 15, 2013, in each case discounted to the
redemption date on a semi-annual basis at the applicable U.S. Treasury rates plus one-half percent, plus
(3) accrued and unpaid interest, if any, to the date of redemption.
8
3
⁄ 4 % Senior Subordinated Notes due 2018
In March 2010, the Company issued $625 million of 8
3
⁄ 4 % Senior Subordinated Notes due 2018 (“8
3
⁄ 4 %
Senior Subordinated Notes”), which are fixed rate bonds to maturity. The net proceeds of $616.2 million, after
debt discount, were used to call and redeem $560.0 million of 8
3
⁄ 8 % Subordinated Notes plus accrued and unpaid
interest and related call premium.
Interest on the 8
3
⁄ 4 % Senior Subordinated Notes is payable semi-annually in cash in arrears on March 15 and
September 15 of each year, commencing September 15, 2010. The 8
3
⁄ 4 % Senior Subordinated Notes are unsecured
senior subordinated obligations ranking junior to all existing and future senior debt, ranking equally to all existing
and future senior subordinated indebtedness, and ranking senior to all existing and future subordinated indebtedness.
Each of the Company’s current and future subsidiaries that is a guarantor under the Corporate Credit Agreement is
also a guarantor of the 8
3
⁄ 4 % Senior Subordinated Notes on an unsecured senior subordinated basis, with certain
immaterial exceptions. The indenture governing the 8
3
⁄ 4 % Senior Subordinated Notes contains covenants including
but not limited to the following: limitations on dividends to shareowners and other restricted payments; dividend
and other payment restrictions affecting the Company’s subsidiaries such that the subsidiaries are generally not
permitted to enter into an agreement that would limit their ability to make dividend payments to the parent; issuance
of indebtedness; asset dispositions; transactions with affiliates; liens; investments; issuances and sales of capital
stock of subsidiaries; and redemption of debt that is junior in right of payment. The indenture governing the 8
3
⁄ 4 %
Senior Subordinated Notes provides for customary events of default, including for nonpayment at final maturity and
for a default of any other existing debt instrument that exceeds $35 million.
The Company may redeem the 8
3
⁄ 4 % Senior Subordinated Notes for a redemption price of 104.375%,
102.188%, and 100.000% on or after March 15, 2014, 2015, and 2016, respectively. At any time prior to
March 15, 2014, the Company may redeem all or part of the 8
3
⁄ 4 % Senior Subordinated Notes at a redemption
price equal to the sum of (1) 100% of the principal, plus (2) the greater of (a) 1% of the face value of the 8
3
⁄ 4 %
Senior Subordinated Notes or (b) the excess over the principal amount of the sum of the present values of
(i) 104.375% of the face value of the 8
3
⁄ 4 % Senior Subordinated Notes, and (ii) interest payments due from the
date of redemption to March 15, 2014, in each case discounted to the redemption date on a semi-annual basis at
the applicable U.S. Treasury rates plus one-half percent, plus (3) accrued and unpaid interest, if any, to the date
of redemption. Prior to March 15, 2013, the Company may redeem up to a maximum of 35% of the aggregate
principal amount of the 8
3
⁄ 4 % Senior Subordinated Notes with the net cash proceeds of one or more equity
offerings by the Company, at a redemption price equal to 108.750% of the principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the redemption date.
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Form 10-K