FairPoint Communications 2009 Annual Report Download - page 131

Table of Contents




Long-term debt for the Company at December 31, 2009 and 2008 is shown below (in thousands):
As a result of the filing of the Chapter 11 Cases (see note 1), all pre-petition debts owed by the Company under the Pre-petition Credit Facility, the
Notes and the Swaps have been classified as liabilities subject to compromise in the consolidated balance sheet as of December 31, 2009.
The estimated fair value of the Company's long-term debt at December 31, 2009 is $1,619.9 million based on market prices of the Company's debt
securities at the balance sheet date.
The Company failed to make the September 30, 2009 principal and interest payments required under the Pre-petition Credit Facility. Failure to
make the principal payment on the due date and failure to make the interest payment within five days of the due date constituted events of default under
the Pre-petition Credit Facility, which permits the lenders to accelerate the maturity of the loans outstanding thereunder, seek foreclosure upon any
collateral securing such loans and terminate any remaining commitments to lend to the Company. In addition, the incurrence of an event of default on the
Pre-petition Credit Facility constituted an event of default under the Swaps at September 30, 2009, which failure resulted in an event of default under the
Swaps upon the expiration of a three business day grace period. Also, the failure to make the October 1, 2009 interest payment on the Notes within
thirty days of the due date constituted an event of default under the Notes. An event of default under the Notes permits the holders of the Notes to
accelerate the maturity of the Notes. Filing of the Chapter 11 Cases constituted an event of default on the New Notes. In addition, as a result of the
Restatement, the Company determined that the Company was not in compliance with the interest coverage ratio maintenance covenant and the leverage
ratio maintenance covenant under the Pre-petition Credit Facility for the measurement period ended June 30, 2009, which constituted an event of default
under each of the Pre-petition Credit Facility and the Swaps, and may have constituted an event of default under the Notes, in each case at June 30,
2009.
On September 25, 2009, the Company entered into forbearance agreements with the lenders under the Pre-petition Credit Facility and the Swaps
under which the lenders agreed to forbear from exercising their rights and remedies under the respective agreements with respect to any events of
default through October 30, 2009. On October 26, 2009, the Company filed the Chapter 11 Cases. The filing of the Chapter 11 Cases constituted an
event of default under each of the Pre-petition Credit Facility, the New Notes and the Swaps. However, the Company believes that any efforts to
enforce payment obligations under these agreements are stayed as a result of the filing of the Chapter 11 Cases. For additional information about the
impact of the Chapter 11 Cases, see note 1.
120
  
Senior secured Pre-petition Credit Facility, variable rates
ranging from 6.75% to 7.00% (weighted average rate of
6.94%) at December 31, 2009, due 2014 to 2015 $ 1,965,450 $ 1,930,000
Senior Notes, 13.125%, due 2018 549,996 551,000
Discount on senior Notes, 13.125%, due 2018 — (10,747)
Total outstanding long-term debt 2,515,446 2,470,253
Less amounts subject to compromise (2,515,446) —
Less current portion — (45,000)
Total long-term debt, net of current portion $ — $ 2,425,253