FairPoint Communications 2005 Annual Report Download - page 82

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(a) 2005 Senior Secured Notes
On February 8, 2005, the Company entered into a credit facility consisting of a revolving facility in an aggregate principal amount of up to
$100.0 million and a term facility in an aggregate principal amount of $588.5 million. On the closing date of the Company’s initial public offering, the
Company drew $566.0 million against the term facility. In addition, on May 2, 2005, the Company drew $22.5 million of borrowings under the delayed
draw term facility of the credit facility. The Company incurred approximately $10.4 million of debt issuance costs associated with entering into the credit
facility and subsequent amendments thereto.
The term facility matures in February 2012 and the revolving facility matures in February 2011. Borrowings bear interest, at the Company’s option, for
the revolving facility and for the term facility at either (a) the Eurodollar rate (as defined in the credit facility) plus an applicable margin or (b) the Base rate (as
defined in the credit facility) plus an applicable margin. The Eurodollar rate applicable margin and the Base rate applicable margin for loans under the credit
facility are 2.0% and 1.0%, respectively. 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. Interest with respect to Base rate loans is
payable quarterly in arrears and interest with respect to Eurodollar loans is payable at the end of the applicable interest period and every three months in the
case of interest periods in excess of three months.
The credit facility provides for payment to the lenders of a commitment fee on any unused commitments equal to 0.5% per annum, payable quarterly in
arrears, as well as other fees.
The credit facility requires certain mandatory prepayments, including first to prepay outstanding term loans under the credit facility and, thereafter, to
repay loans under the revolving facility and/or to reduce revolving facility commitments with, subject to certain conditions and exceptions, 100% of the net
cash proceeds the Company receives from any sale, transfer or other disposition of any assets, 100% of net casualty insurance proceeds and 100% of the net
cash proceeds the Company receives from the issuance of permitted securities and, at certain times if the Company is not permitted to pay dividends, with
50% of the increase in the Company’s Cumulative Distributable Cash (as defined in the credit facility) 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.
The credit facility provides for voluntary prepayments of the revolving facility and the term facility and voluntary commitment reductions of the
revolving facility, subject to giving proper notice and compensating the lenders for standard Eurodollar breakage costs, if applicable.
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