FairPoint Communications 2010 Annual Report Download - page 95

Table of Contents
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Long-term debt for the Company at December 31, 2010 and 2009 is shown below (in thousands):
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Senior secured Pre-Petition Credit Facility, variable rates ranging from 6.75% to 7.00% (weighted average rate of
6.94%) at December 31, 2010, due 2014 to 2015 $ 1,970,963 $1,965,450
Senior Notes, 13.125%, due 2018 549,996 549,996
Total outstanding long-term debt $2,520,959 $ 2,515,446
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 and the Pre-
Petition Notes have been classified as liabilities subject to compromise in the consolidated balance sheet as of December 31, 2010 and 2009.
The estimated fair value of the Company’s long-term debt at December 31, 2010 and 2009 was approximately $1,539.7 million and $1,619.9 million
respectively, based on market prices of the Company’s debt securities at the respective balance sheet dates.
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 permitted 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 Pre-Petition Notes within thirty days of the due date
constituted an event of default under the Pre-Petition Notes. An event of default under the Pre-Petition Notes permitted the holders of the Pre-Petition Notes to
accelerate the maturity of the Pre-Petition Notes. Filing of the Chapter 11 Cases constituted an event of default on the New Notes. In addition, as a result of the
2009 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 Pre-Petition 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.
The approximate aggregate maturities of long-term debt for each of the five years subsequent to December 31, 2010 are as follows (in thousands):
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2011 $ 58,725
2012 63,300
2013 288,300
2014 134,450
2015 1,426,188
Thereafter 549,996
$2,520,959
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