FairPoint Communications 2005 Annual Report Download - page 52

Our old credit facility consisted of an $85.0 million revolving loan facility, of which $45.0 million was available at December 31, 2004, and two term
facilities, a tranche A term loan facility of $40.0 million with $40.0 million outstanding at December 31, 2004 that was to mature on March 31, 2007 and a
tranche C term loan facility with $102.4 million outstanding as of December 31, 2004 that was to mature on March 31, 2007. We repaid all of the borrowings
under our old credit facility with a portion of net proceeds from the offering together with borrowings under our credit facility.
Our credit facility consists of a revolving facility, or the revolver, in a total principal amount of up to $100.0 million, of which $86.7 million was
available at March 1, 2006 and a term loan facility, or the term loan, in a total principal amount of $588.5 million with $588.5 million outstanding at
March 1, 2006. The term loan matures in February 2012 and the revolver matures in February 2011. The revolver has a swingline subfacility in an amount
of $5.0 million and a letter of credit subfacility in an amount of $10.0 million, which will allow issuances of standby letters of credit for our account. Net
borrowings under the revolver were $12.0 million from February 8, 2005 through March 1, 2006 and were used primarily to fund the Berkshire acquisition
and the Bentleyville acquisition (including the repayment of $1.3 million of Berkshire’s debt). A $1.3 million letter of credit was also outstanding as of
March 1, 2006. Borrowings under our revolving facility bear interest, at our option, at either (i) the Eurodollar rate plus 2.0% or (ii) a base rate, as such term
is defined in the credit agreement, plus 1.0%. Effective on September 30, 2005, the Company amended its credit facility to reduce the effective interest rate
margins on the $588.5 million term facility by 0.25% to 1.75% on Eurodollar loans and to 0.75% for Base rate loans.
The credit facility contains financial covenants, including, without limitation, the following tests: a minimum interest coverage ratio equal to or greater
than 3.0:1 and a maximum leverage ratio equal to or less than 5.25:1. The credit facility contains customary affirmative covenants. The credit facility also
contains negative covenants and restrictions, including, among others, with respect to redeeming and repurchasing our other indebtedness, loans and
investments, additional indebtedness, liens, capital expenditures, changes in the nature of our business, mergers, acquisitions, asset sales and transactions
with affiliates. Subject to certain limitations set forth in the credit facility, we are permitted to pay dividends for the period from the closing date of the offering
through July 30, 2005. In addition, we may use all of our Cumulative Distributable Cash (as defined in the credit facility) accumulated after April 1, 2005 to
declare and pay dividends after July 30, 2005, but we may not in general pay dividends in excess of such amount. On March 11, 2005, April 29, 2005 and
September 14, 2005, we entered into technical amendments to our credit facility.
Our credit facility requires us first to prepay outstanding term loans under the credit facility and, thereafter, to repay loans under the new revolver and/or
to reduce revolver commitments (or commitments under the delayed draw facility) under the credit facility with, subject to certain conditions and exceptions,
100% of the net cash proceeds we receive from any sale, transfer or other disposition of any assets, 100% of net casualty insurance proceeds and 100% of the
net cash proceeds we receive from the issuance of permitted securities and, at certain times if we are not permitted to pay dividends, with 50% of the increase
in our cumulative distributable cash during the prior fiscal quarter. Reductions to the revolving commitments under the credit facility from the foregoing
recapture events will not reduce the revolving commitments under the credit facility below $50.0 million. Our credit facility provides for voluntary
prepayments of the revolver and the term loan and voluntary commitment reductions of the revolver (and the delayed draw facility), subject to giving proper
notice and compensating the lenders for standard Eurodollar breakage costs, if applicable.
In 1998, the Company issued $125.0 million aggregate principal amount of the 9 2% notes and $75.0 million aggregate principal amount of the floating
rate notes. Both series of these notes were to mature on May 1, 2008. On February 9, 2005, we repurchased $115.0 million principal amount of the 9 2%
notes and $50.8 million principal amount of the floating rate notes tendered pursuant to the tender offers
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