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Home›Coverage ratios›TELEPHONE AND DATA SYSTEMS INC / DE /: Signing of a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a holder, financial statements and exhibits (Form 8 -K)

TELEPHONE AND DATA SYSTEMS INC / DE /: Signing of a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a holder, financial statements and exhibits (Form 8 -K)

By Jacob Castillo
July 23, 2021
38
0


Item 1.01. Entry into a Material Definitive Agreement
As previously disclosed, on March 2, 2020, Telephone and Data Systems, Inc.
(TDS) entered into a $400,000,000 Credit Agreement by and among TDS as Borrower,
Wells Fargo Bank, National Association, as Administrative Agent, and the other
lenders party thereto and identified therein (Existing Credit Agreement). On
July 20, 2021 (the Effective Date), the Existing Credit Agreement was amended
and restated in its entirety (First Amended and Restated Credit Agreement).

The first amended and updated credit agreement gives TDS a $ 400,000,000
Senior revolving credit facility for general business purposes including working capital and capital expenditures.

The following briefly describes the terms of the Amended and Restated First Credit Agreement:

Borrowings under the First Amended and Restated Credit Agreement bear interest
either at a LIBOR rate (subject to customary LIBOR replacement protocols) or at
an alternative base rate, plus an applicable margin. TDS' interest costs under
the First Amended and Restated Credit Agreement are based on credit ratings from
Standard & Poor's Rating Services, Moody's Investor Services and/or Fitch
Ratings. If TDS' credit ratings were lowered, the credit facility would not
cease to be available solely as a result of a decline in its credit ratings.

The two financial covenants described below are included in the first amended and updated credit agreement:

1. The consolidated interest coverage ratio (the ratio of consolidated EBITDA to consolidated interest expense) cannot be less than 3.00 to 1.00 at the end of a fiscal quarter.

2.Consolidated Leverage Ratio (the ratio of Consolidated Funded Indebtedness to
Consolidated EBITDA) may not be greater than 3.75 to 1.00 as of the end of any
fiscal quarter.

The first Amended and Restated Credit Agreement is not guaranteed, subject to certain restrictions. In addition, certain wholly owned subsidiaries are guarantors under the First Amended and Restated Credit Agreement.

The First Amended and Restated Credit Agreement includes representations and
warranties, covenants, events of default and other terms and conditions that are
substantially similar to TDS' Existing Credit Agreement.

A change of control, as that term is defined in the First Amended and Restated Credit Agreement, of TDS would constitute a default and allow the required lenders and the Administrative Agent to require that all outstanding borrowings under of the first amended and updated credit agreement be repaid.

The continued availability of the First Amended and Restated Credit Agreement
requires TDS to comply with certain negative and affirmative covenants, maintain
the above financial ratios and provide representations on certain matters at the
time of each borrowing.

Amounts under the First Amended and Restated Credit Agreement may be borrowed,
repaid and reborrowed from time to time from and after the Effective Date until
the maturity date. There are outstanding borrowings of $125 million and letters
of credit under the Existing Credit Agreement as of the Effective Date.

Amounts borrowed under the Existing Credit Agreement and the Amended and Restated First Credit Agreement will be due and payable in full on the fifth anniversary of the Effective Date.

The foregoing brief description is qualified by reference to the copy of the
First Amended and Restated Credit Agreement attached hereto as Exhibit 4.1,
which is incorporated herein by reference, and which identifies all the lenders
thereto.

Some of the lenders and/or agents under the First Amended and Restated Credit
Agreement and/or their affiliates may have various relationships with TDS, its
publicly-traded subsidiary, United States Cellular Corporation (UScellular), and
their subsidiaries, involving banking or other financial services, including
checking, cash management, brokerage, lending, investment banking, depository,
indenture trustee and/or other services, including serving as a lender under the
First Amended and Restated Credit Agreement or other TDS and/or UScellular
credit agreements.

First Amended and Updated Credit Agreement by UScellular:

Also on July 20, 2021, UScellular, concluded a $ 300,000,000 Amended and Updated First Credit Agreement (UScellular’s First Amended and Updated Credit Agreement), as disclosed in UScellular Form 8-K dated July 20,

  2021  , which Form 8-K is incorporated by reference herein. The terms and
conditions of the UScellular First Amended and Restated Credit Agreement are
described in such Form 8-K and are substantially similar to those of TDS' First
Amended and Restated Credit Agreement. A copy of the UScellular First Amended
and Restated Credit Agreement, including the forms of the related Guaranty and
Subordination Agreement attached thereto, is incorporated by reference herein as
Exhibit 4.2.


--------------------------------------------------------------------------------

Article 2.03. Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant

The disclosure set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.


Item 9.01. Financial Statements and Exhibits
(d)  Exhibits
Exhibit Number                 Description of Exhibits
4.1                              First Amended and Restated Credit 

Agreement, between TDS, Wells Fargo

                               National Association, as administrative 

agent, and other lenders

                               thereto, dated as of July 20, 2021, 

including affiliate form

                               Guaranty.
4.2                              First Amended and Restated Credit 

Agreement, between UScellular, Toronto

                               Dominion (Texas) LLC, as administrative 

agent, and other lenders

                               thereto, dated as of July 20, 2021, 

including affiliate form

                               Guaranty and Subordination Agreement, is hereby incorporated by
                               reference to Exhibit 4.1 to UScellular's Current Report on Form 8-K
                               dated July 20, 2021.
104                            Cover Page Interactive Data File - the cover page XBRL tags are embedded
                               within the Inline XBRL document.


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