FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 24, 2014
UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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001-9712 |
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62-1147325 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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8410 West Bryn Mawr, Chicago, Illinois |
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60631 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant's telephone number, including area code: (773) 399-8900
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
This Current Report on Form 8-K is being filed to disclose the Third Amendment dated as of July 24, 2014 (“Third Amendment”) to the Revolving Credit Agreement dated December 17, 2010 (“Revolving Credit Agreement”) by and among United States Cellular Corporation (“U.S. Cellular”) as Borrower, on the one hand, and Toronto Dominion (Texas) LLC, as Administrative Agent, and the other lenders party thereto, on the other hand (collectively, “Lender Parties”).
As previously disclosed, the Revolving Credit Agreement permits U.S. Cellular to borrow up to $300,000,000 from time to time. A description of the Revolving Credit Agreement (prior to the amendments described below), and a description of any material relationships between U.S. Cellular and its affiliates and any of the other parties to the Revolving Credit Agreement, are included in U.S. Cellular’s Form 8-K dated December 17, 2010 and are incorporated by reference herein.
Subsequently, U.S. Cellular and the Lender Parties entered into a First Amendment to the Revolving Credit Agreement dated as of September 2, 2011 (which reduced the applicable rates on the commitment and borrowings) and a Second Amendment to the Revolving Credit Agreement dated as of December 13, 2012 (which extended the maturity date from December 2015 to December 2017).
The continued availability of the Revolving Credit Agreement requires U.S. Cellular to comply with certain negative and affirmative covenants, including certain financial covenants. The financial covenants include requirements to satisfy a Consolidated Interest Coverage Ratio (the ratio of Consolidated EBITDA to Consolidated Interest Charges) and a Consolidated Leverage Ratio (the ratio of Consolidated Funded Indebtedness to Consolidated EBITDA).
In order to provide U.S. Cellular with more financial flexibility, U.S. Cellular and the Lender Parties negotiated and entered into the Third Amendment to amend the Consolidated Leverage Ratio covenant in Section 7.10(b) of the Revolving Credit Agreement. No change was made to the Consolidated Interest Coverage Ratio covenant.
The
following identifies changes made to the Consolidated Leverage Ratio covenant
in Article VII of the Revolving Credit Agreement by the Third Amendment (the
following shows additions underlined and deletions are shown in [brackets]):
“So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:
. . .
7.10 Financial Covenants.
(a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 3.00 to 1.00
(b) Consolidated Leverage Ratio. Permit the
Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower
to be greater than [3.00 to 1.00.] the ratios indicated for each
period specified below:
Period Ratios
From July 1, 2014 through December 31, 2015 3.75 to 1.00
From January 1, 2016 through June 30, 2016 3.50 to 1.00
From July 1, 2016 through December 31, 2016 3.25 to 1.00
From January 1, 2017 and thereafter 3.00 to 1.00”
In addition, certain technical amendments were also made by the Third Amendment. The foregoing brief description is qualified by reference to the copy of the Third Amendment attached hereto as Exhibit 4.1, which is incorporated herein by reference, and which identifies the Lender Parties thereto.
Currently, there are no borrowings under the Revolving Credit Agreement except for approximately $17.5 million relating to letters of credit.
Item 2.03. Creation of a Direct Financial Obligation or an 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:
In accordance with the provisions of Item 601 of Regulation S-K, any Exhibits filed herewith are set forth on the Exhibit Index attached hereto.
SIGNATURES |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. |
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United States Cellular Corporation |
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(Registrant) |
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Date: |
July 25, 2014 |
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By: |
/s/ Steven T. Campbell |
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Steven T. Campbell |
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Executive Vice President - Finance, |
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Chief Financial Officer and Treasurer |
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(principal financial officer) |
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EXHIBIT INDEX |
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The following exhibits are filed herewith as noted below. |
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Exhibit Number |
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Description of Exhibit |
4.1 |
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Third Amendment dated as of July 24, 2014 to the Revolving Credit Agreement |
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Exhibit 4.1
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), is entered into as of July 24, 2014 among UNITED STATES CELLULAR CORPORATION, a Delaware corporation (the "Borrower"), each lender party hereto (collectively, the "Lenders" and individually, a "Lender"), TORONTO DOMINION (TEXAS) LLC, as Administrative Agent, and THE TORONTO DOMINION BANK, NEW YORK BRANCH, as Swing Line Lender and L/C Issuer.
R E C I T A L S:
A. The Borrower, the Lenders, the Swing Line Lender, the L/C Issuer and the Administrative Agent entered into that certain Credit Agreement dated as of December 17, 2010, as amended by that certain First Amendment to Credit Agreement, dated as of September 2, 2011 and that certain Second Amendment to Credit Agreement, dated as of December 13, 2012 (as amended, restated or substituted from time to time, the "Credit Agreement"). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
B. The Borrower has requested an amendment to the maximum permitted Consolidated Leverage Ratio, and the several Lenders parties to this Amendment (which Lenders constitute the Required Lenders) are willing to agree to such amendment, subject to the performance and observance in full of each of the covenants, terms and conditions, and in reliance upon all of the representations and warranties of the Borrower, set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants, terms and conditions, and in reliance upon the representations and warranties, in each case contained herein, the parties hereto agree hereby as follows:
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, shall be substantially in the form of Exhibit A or any other form approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
"Responsible Officer" means the Chairman, President and Chief Executive Officer, Executive Vice President - Finance, Chief Financial Officer and Treasurer, or Vice President and Controller of the Borrower, or the Senior Vice President – Finance and Treasurer or Vice President and Assistant Treasurer of the Parent Company and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the Borrower so designated by any two of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the Borrower designated in or pursuant to an agreement between the Borrower and the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which shall be substantially in the form of Exhibit B or any other form approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
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(a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by (A) telephone, or (B) a Committed Loan Notice; provided that any telephone notice must be confirmed promptly by delivery to the Administrative Agent of a Committed Loan Notice. Each such Committed Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate Committed Loans or conversion of any Eurodollar Rate Loans to Base Rate Committed Loans; provided, however, that if the Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of "Interest Period," the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice shall specify (i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.
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(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than the ratios indicated for each period specified below:
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From July 1, 2014 through December 31, 2015 |
3.75 to 1.00 |
From January 1, 2016 through June 30, 2016 |
3.50 to 1.00 |
From July 1, 2016 through December 31, 2016 |
3.25 to 1.00 |
From January 1, 2017 and thereafter |
3.00 to 1.00 |
10.17 Electronic Execution of Assignments and Certain Other Documents. The words "execution," "signed," "signature," and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other Committed Loan Notices, Swingline Loan Notices, waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers effective as of the Third Amendment Effective Date. |
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UNITED STATES CELLULAR CORPORATION |
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TORONTO DOMINION (TEXAS) LLC, |
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as Administrative Agent |
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THE TORONTO DOMINION BANK, NEW YORK BRANCH, |
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as L/C Issuer and Swing Line Lender |
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[________________], |
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as a Lender |
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