Print Page  Close Window

SEC Filings

S-4
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4 on 04/01/1999
Entire Document
 
<PAGE>
 
               AVALON CABLE HOLDINGS FINANCE, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
 
 
   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. The Company and Avalon New
England 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
Eurodollar loans and (b) with respect to tranche A term loans and the revolving
credit facility was 2.00% per annum for Base Rate loans and 3.00% per annum for
Eurodollar loans. The applicable margin for the tranche A term loans and the
revolving credit facility are subject to performance based grid pricing which
is determined based on upon the consolidated leverage ratio of the Co-
Borrowers. The interest rate for the tranche A and tranche B term loans
outstanding at December 31, 1998 was 8.58% and 9.33%, respectively. Interest is
payable on a quarterly basis. Accrued interest on the borrowings incurred by
Avalon Cable of Michigan, Inc. under the credit facility was $1,390 at December
31, 1998.
 
   The Credit Facility contains restrictive covenants which among other things
require the Co-Borrowers to maintain certain ratios including consolidated
leverage ratios and the interest coverage ratio, fixed charge ratio and debt
service coverage ratio.
 
   The obligations of the Co-Borrowers under the Credit Facility are secured by
substantially all of the assets of the Co-Borrowers. In addition, the
obligations of the Co-Borrowers under the Credit Facility are guaranteed by
affiliated companies; Avalon Cable of Michigan Holdings, Inc., Avalon Finance,
Avalon Cable of New England Holdings, Inc., Avalon Cable Holdings, LLC and
Avalon Cable LLC.
 
 Subordinated debt
 
   In December 1998, Avalon Finance became a co-issuer of an $150,000 principal
balance, Senior Subordinated Notes ("Subordinated Notes") offering and the
Company became a co-issuer of an $196,000, accreted value, Senior Discount
Notes ("Senior Discounts Notes") offering. In conjunction with these
financings, Avalon Finance received $18,130 from Avalon Michigan as a partial
payment against the Company's note receivable--affiliate from Avalon Michigan.
Avalon Michigan paid $75 in interest during the period from October 21, 1998
(inception) through December 31, 1998. The cash proceeds received of $18,206
were used by Avalon Finance to make a partial principal payment of $18,130 on
its note payable--affiliate and an interest payment of $75 to Avalon New
England.
 
   The Subordinated Notes mature on December 1, 2008, and interest accrues at a
rate of 9.375% per annum. Interest is payable semi annually in arrears on June
1 and December 1 of each year, commencing on June 1, 1999. The Senor Discount
Notes also mature on December 1, 2008, and interest accrues at a rate of
11.875% per annum on the principal amount at maturity on the Senior Discount
Notes. Interest is payable semi-annually in arrears on December 31, 1999.
 
5. Commitment and Contingencies
 
   From time to time, the Company is involved with claims that arise in the
normal course of business. In the opinion of management, the ultimate liability
with respect to these claims will not have a material adverse effect on the
financial position of the Company.
 
                                      F-95