Windstream 2015 Annual Report Download - page 193

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-63
5. Long-term Debt and Lease Obligations, Continued:
Senior Secured Credit Facility - In connection with the REIT spin-off, on April 24, 2015, Windstream Services amended its existing
senior secured credit facility which includes a revolving line of credit in an aggregate principal amount of $1,250.0 million and a
tranche B5 term loan. The amended credit facility provides that Windstream Services may seek to obtain incremental revolving
or term loans in an unlimited amount subject to maintaining a maximum secured leverage ratio and other customary conditions,
including obtaining commitments and pro forma compliance with financial maintenance covenants consisting of a maximum debt
to consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio and a minimum interest coverage
ratio. In addition, Windstream Services may request extensions of the maturity date under any of its existing revolving or term
loan facilities. Interest rates applicable to term loans are, at Windstream Services’ option, equal to either a base rate plus a margin
of 1.75 percent per annum or London Interbank Offered Rate (“LIBOR”) plus a margin of 2.75 percent per annum. LIBOR and
the base rate for term loans shall at no time be less than 0.75 percent and 1.75 percent, respectively. Term loans made under the
credit facility are subject to quarterly amortization payments in an aggregate amount equal to 0.25 percent of the initial principal
amount of such term loans, with the remaining balance payable on August 8, 2019. The senior secured credit facility is guaranteed,
jointly and severally, by certain of Windstream Services’ wholly owned subsidiaries.
In conjunction with the spin-off, Windstream completed a debt-for-debt exchange retiring $1.7 billion aggregate principal amount
of borrowings outstanding under Tranches A3, A4 and B4 of Windstream Services’ senior credit facility and $752.2 million
aggregate principal amount of borrowings outstanding under the revolving line of credit. Following the completion of the debt-
for-debt exchange, Windstream Services repaid the remaining $241.8 million aggregate principal amount of borrowings under
Tranche B4.
Revolving line of credit - As a result of the April 24, 2015 amendment to the credit facility, the maturity date of the revolving line
of credit was extended from December 17, 2015 to April 24, 2020. Windstream Services may obtain revolving loans and may
issue up to $30.0 million of letters of credit, which upon issuance reduce the amount available for other extensions 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. Borrowings under the revolving line of credit may be used for permitted acquisitions,
working capital and other general corporate purposes of Windstream Services and its subsidiaries. Windstream Services will pay
a commitment fee on the unused portion of the commitments under the revolving credit facility that will range from 0.40 percent
to 0.50 percent per annum, depending on the debt to consolidated EBITDA ratio of Windstream Services and its subsidiaries.
Revolving loans made under the credit facility are not subject to interim amortization and such loans are not required to be repaid
prior to April 24, 2020, other than to the extent the outstanding borrowings exceed the aggregate commitments under the revolving
credit facility. Interest rates applicable to loans under the revolving line of credit are, at Windstream Services’ option, equal to
either a base rate plus a margin ranging from 0.25 percent to 1.00 percent per annum or LIBOR plus a margin ranging from 1.25
percent to 2.00 percent per annum, based on the debt to consolidated EBITDA ratio of Windstream Services and its subsidiaries.
During 2015, Windstream Services borrowed $2,335.0 million under the revolving line of credit in its senior secured credit facility
and through completion of the debt-for-debt exchange and repayments retired $2,660.0 million of these borrowings in 2015.
Considering letters of credit of $23.1 million, the amount available for borrowing under the revolving line of credit was $926.9
million at December 31, 2015.
The variable interest rate on the revolving line of credit ranged from 2.19 percent to 4.50 percent, and the weighted average rate
on amounts outstanding was 2.39 percent during 2015, as compared to variable interest rates during 2014 which ranged from 2.41
percent to 4.50 percent with a weighted average rate on amounts outstanding of 2.49 percent.