Windstream 2014 Annual Report Download - page 171

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
____
F-55
4. Long-term Debt and Lease Obligations, Continued:
Revolving line of credit - Windstream Corp. borrowed $1,315.0 million under the revolving line of credit in its senior secured
credit facility and repaid $1,280.0 million of these borrowings during 2014. Letters of credit are deducted in determining the total
amount available for borrowing under the revolving line of credit. Accordingly, the total amount outstanding under the letters of
credit and the indebtedness incurred under the revolving line of credit may not exceed $1,250.0 million. Considering letters of
credit of $21.0 million, the amount available for borrowing under the revolving line of credit was $604.0 million at December 31,
2014. The revolving line of credit will expire December 17, 2015, and as a result, amounts outstanding under the revolving line
of credit are included in current maturities as of December 31, 2014. If not for the pending spin-off of certain network and real
estate assets further discussed in Note 16, we would have amended the revolving line of credit and extended its maturity during
2014. In conjunction with completing the proposed spin-off, we expect to lower long-term debt by approximately $3.4 billion
through receipt of a cash payment of $1.2 billion and completion of a $2.35 billion tax-free debt exchange, of which borrowings
outstanding under the revolving line of credit will be included. Currently, we anticipate that the spin-off will occur in the first half
of 2015. Following the spin-off, we intend to amend Windstream Corp.’s revolving line of credit and extend its maturity to 2020.
If completion of the spin-off is delayed or otherwise not consummated, we will proceed with our plans to amend the revolving
line of credit agreement and extend its maturity by June 30, 2015.
The variable interest rate on the revolving line of credit ranged from 2.41 percent to 4.50 percent, and the weighted average rate
on amounts outstanding was 2.49 percent during 2014, as compared to variable interest rates during 2013 which ranged from 2.42
percent to 4.50 percent with a weighted average rate on amounts outstanding of 2.60 percent.
Debentures and Notes Issued in 2013
2021 Notes - On August 26, 2013, Windstream Corp. completed the private placement of $500.0 million in aggregate principal
amount of 7.750 percent senior unsecured notes due October 1, 2021, at an issue price of 103.500 percent to yield 7.171 percent
(“the 2021 Notes”). Interest is paid semi-annually. The notes had terms substantially identical to the terms of the existing 7.750
percent senior notes due 2021, but were issued under a separate indenture. During the fourth quarter of 2013 pursuant to a registration
rights agreement, the notes were exchanged for additional 7.750 percent senior notes due 2021 issued under the indenture governing
the existing notes. For financial reporting purposes, both the newly issued and existing 7.750 percent senior notes due 2021 are
collectively referred to as the “2021 Notes”. Debt issuance costs associated with the new borrowings were $10.1 million, which
were recorded in other assets in the accompanying consolidated balance sheet and will be amortized into interest expense over
the life of the borrowings.
2023 Notes - On January 23, 2013, Windstream Corp. completed the private placement of $700.0 million in aggregate principal
amount of 6.375 percent senior unsecured notes due August 1, 2023, at an issue price at par to yield 6.375 percent (“the 2023
Notes”). Interest is paid semi-annually. Debt issuance costs associated with the new borrowings were $13.9 million, which were
recorded in other assets in the accompanying consolidated balance sheet and will be amortized into interest expense over the life
of the borrowings.
Debentures and Notes Repaid in 2013
2013 Notes - On August 1, 2013, Windstream Corp. repaid at maturity all of the outstanding $800.0 million aggregate principal
amount of these senior unsecured notes utilizing available borrowings under the revolving line of credit.
2019 Notes - On August 12, 2013, Windstream Corp. announced a tender offer to purchase for cash all of the outstanding $500.0
million aggregate principal amount of 7.000 percent senior unsecured notes due March 15, 2019 (“2019 Notes”). Prior to the
expiration of the tender offer, approximately $431.2 million of the 2019 Notes had been tendered. On September 25, 2013, the
redemption of the remaining $68.8 million outstanding principal amount was settled. Proceeds from the issuance of the 2021
Notes, together with available cash, were used to pay the consideration for the tender offer and to redeem the outstanding 2019
Notes, along with related fees and expenses.
PAETEC 2017 Notes - In connection with our acquisition of PAETEC on November 30, 2011, Windstream Corp. assumed $650.0
million of 8.875 percent notes due June 30, 2017 (“PAETEC 2017 Notes”). Interest was payable semi-annually. On January 8,
2013, Windstream Corp. announced a tender offer to purchase for cash any and all of the outstanding $650.0 million aggregate
principal amount of PAETEC 2017 Notes. Prior to the expiration of the tender offer, approximately $588.5 million of the PAETEC
2017 Notes had been tendered. On February 25, 2013, the redemption of the remaining $61.5 million outstanding principal amount
was settled. Proceeds from the issuance of the 2023 Notes, together with available cash, were used to pay the consideration for
the tender offer and to redeem all of the outstanding PAETEC 2017 Notes, along with related fees and expenses.