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S-4
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4 on 04/01/1999
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                       AVALON CABLE LLC AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
8. Accounts Payable and Accrued Expenses
 
   At December 31, 1998, accounts payable and accrued expenses consist of the
following:
 

<TABLE>
      <S>                                                                <C>
      Accrued corporate expenses........................................ $  404
      Accrued programming costs.........................................    564
      Taxes payable.....................................................    276
      Other.............................................................     87
                                                                         ------
                                                                         $1,331
                                                                         ======
</TABLE>

 
9. Debt
 
 Credit Facilities
 
   On May 28, 1998, Avalon New England entered into a term loan and revolving
credit agreement with a major commercial lending institution (the "Credit
Agreement"). The Credit Agreement allowed for aggregate borrowings under Term
Loans A and B (collectively, the "Term Loans") and a revolving credit facility
of $30,000 and $5,000, respectively. The proceeds from the Term Loans and
revolving credit facility were used to fund the acquisitions made by Avalon New
England and to provide for Avalon New England's working capital requirements.
 
   In December 1998, Avalon New England retired the Term Loans and revolving
credit agreement through the proceeds of a capital contribution from Avalon.
The fees and associated costs relating to the early retirement of this debt was
$1,311.
 
   On November 6, 1998, Avalon New England became a co-borrower along with
Avalon Cable Michigan, Inc. ("Avalon Michigan") and Avalon Cable Finance, Inc.
("Avalon Finance"), affiliated companies (collectively referred to as the "Co-
Borrowers"), on a $320,888 senior credit facility, which includes term loan
facilities consisting of (i) tranche A term loans of $120,888 and (ii) tranche
B term loans of $170,000, and a revolving credit facility of $30,000
(collectively, the "Credit Facility"). Subject to compliance with the terms of
the Credit Facility, borrowings under the Credit Facility will be available for
working capital purposes, capital expenditures and pending and future
acquisitions. The ability to advance funds under the tranche A term loan
facility terminates on March 31, 1999. The tranche A term loans are subject to
minimum quarterly amortization payments commencing on January 31, 2001 and
maturing on October 31, 2005. The tranche B term loans are subject to minimum
quarterly payments commencing on January 31, 2001 with substantially all of
tranche B term loans scheduled to be repaid in two equal installments on July
31, 2006 and October 31, 2006. The revolving credit facility borrowings are
scheduled to be repaid on October 31, 2005.
 
   On November 6, 1998, Avalon Michigan borrowed $265,888 under the Credit
Facility. In connection with the Senior Subordinated Notes and Senior Discount
Notes offerings, Avalon Michigan repaid $125,013 of the Credit Facility, and
the availability under the Credit Facility was reduced to $195,000. Avalon
Michigan had borrowings of $11,300 and $129,575 outstanding under the tranche A
and tranche B term note facilities, respectively, and had available $30,000 for
borrowings under the revolving credit facility. Avalon New England and Avalon
Finance had no borrowings outstanding under the Credit Facility at December 31,
1998.
 
   The interest rate under the Credit Facility is a rate based on either (i)
the Base Rate (a rate per annum equal to the greater of the prime rate and the
federal funds rate plus one-half of 1%) or (ii) the Eurodollar Rate (a rate per
annum equal to the Eurodollar base rate divided by 1.00 less the Eurocurrency
reserve requirement plus, in either case, the applicable margin). As of
December 31, 1998, the applicable margin was (a) with respect to the tranche B
term loans was 2.75% per annum for Base Rate loans and 3.75% per annum for
 
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