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FairPoint amends loan, modifying interest coverage and leverage ratios
By Sara Rosenberg
New York, Feb. 27 - FairPoint Communications Inc. amended its credit facility, revising the interest coverage and leverage ratios, according to an 8-K filed with the Securities and Exchange Commission Wednesday.
The interest coverage ratio was changed to no less than 1.85:1.00 for any fiscal quarter ending after Dec. 31 and on or prior to Dec. 31, 2008, 2.50:1.00 for any fiscal quarter ending after Dec. 31, 2008 and on or prior to Dec. 31, 2009, and 2.75:1:00 for any fiscal quarter ending thereafter.
The leverage ratio was changed to a maximum of 6.50:1.00 for any quarter ending after Dec. 31 and on or prior to Dec. 31, 2008, 5.00:1.00 for any fiscal quarter ending after Dec. 31, 2008 and on or prior to Dec. 31, 2009, and 4.50:1:00 for any fiscal quarter ending thereafter.
Also, the amendment calls for pricing to increase to Libor plus 400 basis points, with a 2.5% Libor floor, and two years of call protection if the facility isn't repaid by May 1. If the facility isn't repaid by Jan.1, 2009, pricing would increase to Libor plus 600 bps, with a 3.25% Libor floor.
In addition, the amendment provides flexibility with respect to expenditures related to the merger with Verizon Communications Inc.'s wireline operations in Maine, New Hampshire and Vermont during the three months ending March 31 and provide accommodations for certain restructuring charges that would be incurred by the company if the merger is not consummated.
Deutsche Bank is the administrative agent on the deal.
The amendment was completed on Feb. 25.
FairPoint is a Charlotte, N.C., provider of communications services to rural communities.
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