- the accreted value of the Avalon 11 7/8% notes in the case of repurchases
of Avalon notes prior to December 1, 2003; or
- the total principal amount of the Avalon 11 7/8% notes in the case of
repurchases of Avalon 11 7/8% notes on or after December 1, 2003, plus
accrued and unpaid interest and liquidated damages, if any, to the date
Our acquisition of Avalon will trigger this right.
Among other restrictions, the indenture governing the Avalon 11 7/8% notes
limits the ability of the issuers and their specified subsidiaries to:
- incur additional debt;
- pay dividends or make specified other restricted payments;
- enter into transactions with affiliates;
- sell assets or subsidiary stock;
- create liens;
- restrict dividends or other payments from restricted subsidiaries;
- merge, consolidate or sell all or substantially all of their combined
- with respect to restricted subsidiaries, issue capital stock.
The Avalon 11 7/8% notes contain events of default that include a
cross-default provision triggered by the failure of Avalon Cable LLC, Avalon
Cable Holdings Finance, Inc. or any specified subsidiary to make payment on debt
with total principal amount of $5 million or more or the acceleration of debt of
this amount prior to maturity.
As of June 30, 1999, the total accreted value of the outstanding Avalon
11 7/8% notes was $118.1 million.
THE AVALON 9 3/8% NOTES. On December 3, 1998, Avalon Cable of New England
LLC, Avalon Cable Finance, Inc. and Avalon Cable of Michigan, Inc. jointly
issued $150 million total principal amount at maturity of 9 3/8% senior
subordinated notes due December 1, 2008. On July 22, 1999, the issuers exchanged
$150 million of the original issued and outstanding 9 3/8% senior subordinated
notes for an equivalent amount of new 9 3/8% senior subordinated notes due
December 1, 2008. The form and terms of the new Avalon 9 3/8% notes are
substantially the same as the form and terms of the original Avalon 9 3/8% notes
except that the new Avalon 9 3/8% notes will be registered under the federal
securities laws and will not bear a legend restricting the transfer thereof.
Interest on the Avalon 9 3/8% notes accrues at a rate of 9.375% per annum
from the date of issuance and is payable semiannually in arrears on June 1 and
December 1. The Avalon 9 3/8% notes are guaranteed by Avalon Cable of Michigan,
Inc. Avalon Cable of Michigan, Inc., however, does not have any significant
assets other than its interest in Avalon Cable LLC.
On or after December 1, 2003, the issuers may redeem the Avalon 9 3/8%
notes in whole or in part. Until December 1, 2001, the issuers may redeem up to
35% of the total principal amount of the Avalon 9 3/8% notes at a redemption
price equal to 109.375% of