Cincinnati Bell 2012 Annual Report Download - page 171

Form 10-K Part II Cincinnati Bell Inc.
additional debt or liens, pay dividends, repurchase Company common stock, sell, transfer, lease, or dispose of
assets and make investments or merge with another company. If the Company were to violate any of its
covenants and were unable to obtain a waiver, it would be considered a default. If the Company were in default
under the Corporate Credit Agreement, no additional borrowings under this facility would be available until the
default was waived or cured. The Corporate Credit Agreement provides for customary events of default,
including for failure to make any payment when due and for cross default on any other existing indebtedness.
Public Indentures
Various issuances of the Company’s public debt, which include the 8
1
⁄ 4 % Senior Notes due 2017, 8
3
⁄ 4 %
Senior Subordinated Notes due 2018, and 8
3
⁄ 8 % Senior Notes due 2020, are governed by indentures which
contain covenants that, among other things, limit the Company’s ability to incur additional debt or liens, pay
dividends or make other restricted payments, sell, transfer, lease, or dispose of assets and make investments or
merge with another company.
One of the financial covenants permits the issuance of additional Indebtedness up to a 4:00 to 1:00
Consolidated Adjusted Senior Debt to EBITDA ratio (as defined by the individual indentures). Once this ratio
exceeds 4:00 to 1:00, the Company is not in default; however, additional indebtedness may only be incurred in
specified permitted baskets, including a credit agreement basket providing full access to the Corporate Credit
Agreement. Also, the Company’s ability to make Restricted Payments (as defined by the individual indentures)
would be limited, including common stock dividend payments or repurchasing outstanding Company shares. As
of December 31, 2012, the Company was below the 4:00 to 1:00 Consolidated Adjusted Senior Debt to EBITDA
ratio. In addition, the Company had in excess of $200 million available in its restricted payment basket as of
December 31, 2012. If the Company is under the 4:00 to 1:00 ratio on a pro forma basis, the Company may use
this basket to make restricted payments, including share repurchases or dividends, and/or the Company may
designate one or more of its subsidiaries as Unrestricted (as defined in the various indentures) such that any
Unrestricted Subsidiary would generally not be subject to the restrictions of these various indentures. However,
certain provisions which govern the Company’s relationship with Unrestricted Subsidiaries would begin to apply.
CyrusOne 6
3
⁄ 8 % Senior Notes
The indenture governing the CyrusOne 6 3/8% Senior Notes contains affirmative and negative covenants
customarily found in indebtedness of this type, including a number of covenants that, among other things,
restrict, subject to certain exceptions, CyrusOne’s ability to: incur secured or unsecured indebtedness; pay
dividends or distributions on its equity interests, or redeem or repurchase equity interests of CyrusOne or
CyrusOne LP; make certain investments or other restricted payments; enter into transactions with affiliates; enter
into agreements limiting the ability of the operating partnership’s subsidiaries to pay dividends or make certain
transfers and other payments to the operating partnership or to other subsidiaries; sell assets; and merge,
consolidate or transfer all or substantially all of the operating partnership’s assets. Notwithstanding the foregoing,
the covenants contained in the indenture do not restrict CyrusOne’s ability to pay dividends or distributions to
stockholders to the extent (i) no default or event of default exists or is continuing under the indenture and
(ii) CyrusOne believes in good faith that they qualify as a REIT under the Internal Revenue Code and the
payment of such dividend or distribution is necessary either to maintain their status as a REIT or to enable them
to avoid payment of any tax that could be avoided by reason of such dividend or distribution. CyrusOne LP and
its subsidiaries are also required to maintain total unencumbered assets of at least 150% of their unsecured debt
on a consolidated basis, provided that for the purposes of such calculation their revolving credit facility shall be
treated as unsecured indebtedness.
Extinguished Notes
In the fourth quarter of 2012, the Company redeemed its 7% Senior Notes due 2015 (“7% Senior Notes”)
with a principal balance of $247.5 million, a portion of its 8
3
⁄ 8 % Senior Notes due 2020 with a principal balance
of $91.1 million, purchased pursuant to a tender offer conducted during the fourth quarter of 2012, and CBT
97
Form 10-K