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S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 05/28/1999
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            AVALON CABLE OF MICHIGAN HOLDINGS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                             December 31, 1998

   On November 6, 1998, Avalon Michigan borrowed $265,888 under the Credit
Facility in order to consummate the Merger. In connection with the Senior
Subordinated Notes (as defined below) and Senior Discount Notes (as defined
below) 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 $140,875 outstanding under the tranche B term note
facilities, 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 Effective Rate plus 1/2 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 Requirements) 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 tranch A term loans and the
revolving credit facility was 2.00% per annum for Base Rate loans and 3.00% 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 B term loans outstanding at
December 31, 1998 was 9.19%. Interest is payable on a quarterly basis. Accrued
interest on the borrowings under the credit facility was $1,389 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
Avalon Cable of Michigan Holdings, Inc., Avalon Cable LLC, Avalon Cable Finance
Holdings, Inc., Avalon Cable of New England Holdings, Inc. and Avalon Cable
Holdings, LLC.

   Subordinated debt

   In December 1998, Avalon Michigan became a co-issuer of a $150,000,
principal balance, Senior Subordinated Notes ("Subordinated Notes") offering
and Michigan Holdings became a co-issuer of a $196,000, gross proceeds, Senior
Discount Notes ("Senior Discount Notes") offering. In conjunction with these
financings, Avalon Michigan paid $18,130 to Avalon Finance as a partial payment
against Avalon Michigan's note payable--affiliate. Avalon Michigan paid $75 in
interest on this note payable--affiliate during the period from inception (June
2, 1998) through December 31, 1998.

   The Subordinated Notes mature on December 1, 2008, and interest accrued 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. Accrued interest on the Subordinated Notes was $1,078 at December
31, 1998. The Senior Discount Notes mature on December 1, 2008. Until December
1, 2003, interest will not be paid currently on the Senior Discount Notes, but
the accreted value will increase (representing original issue discount) between
the date of original issuance and December 1, 2003. Beginning on December 1,
2003, interest will accrue at a rate of 11.875% per annum and will be payable
semi-annually in arrears on June 1 and December 1 of each year, to holders of
record on the immediately preceding May 15 and November 15. Original issue
discount accretion on the Senior Discount Notes was $1,083 at December 31,
1998.

                                      F-33