FairPoint Communications 2002 Annual Report Download - page 512

borrow, repay, and reborrow from time to time until the agreement
expires on January 3, 2005. Interest is due quarterly and is based on
the prevailing bank prime rate plus one and one-half percent or such
lessor amount as determined by RTFC. The rate at December 31, 2002 was
5.8%. The agreement is subject to the provisions of the mortgage and
security agreement described below. In addition, the aggregate amount
of outstanding principal balance of all Partnership unsecured
indebtedness is limited to $1,000,000 at any one time.
The maximum amount of short-term borrowings at any month-end during
2002 and 2001 were $1,500,000 and $500,000, respectively.
NOTE 6. LONG-TERM DEBT
Long-term debt consists of:
2001
---------------
RTFC notes - variable rate $ 160,160
RTFC notes - variable rate $ 76,530
---------------
Total long-term debt 236,690
Less current portion (236,690)
---------------
$ -
===============
These mortgage notes outstanding at December 31, 2001, are to be
repaid in equal quarterly installments covering principal and interest
beginning two to three years after date of issue and expiring by 2002.
The interest rate on the debt is a variable rate established
periodically by the RTFC. The rate at December 3, 2001, was 5.3%.
Substantially all assets of the Partnership are pledged as security
under the mortgage and security agreement with the RTFC.
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ILLINOIS VALLEY CELLULAR RSA 2-III PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
NOTE 6. LONG-TERM DEBT (Continued)
The mortgage and security and loan agreements underlying the RTFC
notes contain certain restrictions on Partnership distributions,
return of partner capital contributions, and investment in, or loans
to others. In 2000, the Partnership received a waiver from the lender
to make partnership distributions. Also included in the loan agreement
is a provision, which requires the partners to infuse, on an ongoing
basis, the greater of sufficient amounts of equity to accommodate any
cash shortfalls or certain specified amounts. Further, the Partnership
is required, under the loan agreement, to achieve a debt service
coverage ratio of not less than 1.25.
Of the funds available under the RTFC approved loans, including
amendments, all amounts were advanced as of December 31, 2002.
Cash paid for interest net amounts capitalized for 2002, 2001, and
2000 totaled $24,922, $62,028, and $97,253, respectively.
The fair value of the partnership debt is estimated based on the
discounted value of future cash flows expected to be paid using
current rates of borrowing for similar types of debt. The fair value
of debt approximates carrying value at December 31, 2002 and 2001.