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Telephone and Data Systems, unit amend revolvers’ leverage ratios
By Angela McDaniels
Tacoma, Wash., July 25 – Telephone and Data Systems, Inc. amended the consolidated leverage ratio covenant for its $400 million revolving credit facility due 2017 on Thursday, according to an 8-K filing with the Securities and Exchange Commission.
Following the amendment, the company is required to keep its consolidated leverage ratio at or below 3.75 times from July 1 through Dec. 31, 2015, 3.5 times from Jan. 1, 2016 through June 30, 2016, 3.25 times from July 1, 2016 through Dec. 31, 2016 and 3 times from Jan. 1, 2017 and thereafter.
Prior to the amendment, the cap was 3 times for each period.
Subsidiary United States Cellular Corp. made the same amendment to the consolidated leverage ratio covenant for its $300 million revolver due 2017 on Thursday, according to a separate 8-K filing.
The companies said the changes give them more financial flexibility.
Each revolver’s consolidated interest coverage ratio covenant is unchanged. The companies are required to maintain a minimum consolidated interest coverage ratio of 3 times.
Currently, there are no borrowings outstanding except for about $300,000 and $17.5 million relating to letters of credit under the Telephone and Data Systems revolver and the U.S. Cellular revolver, respectively.
Bank of America, NA is the administrative agent for the Telephone and Data Systems revolver, and Toronto Dominion (Texas) LLC is the administrative agent for the U.S. Cellular revolver.
Telephone and Data Systems is a diversified telecommunications services company. United States Cellular provides wireless telecommunications services. Both are based in Chicago.
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