| Debt | 6. DEBT
Outstanding debt consisted of the following (dollars in
thousands):
June 30, December 31,
Bank credit facility $ 1,014,000 $ 1,128,000
5 1 2 200,000 200,000
6 3 8 300,000 300,000
Total debt $ 1,514,000 $ 1,628,000
Less: current portion 13,575 16,575
Total long-term debt, gross (less current portion) $ 1,500,425 $ 1,611,425
Less: deferred financing costs, net 10,652 14,350
Total long-term debt, net (less current portion) $ 1,489,773 $ 1,597,075
2017 Financing Activity
On June 30, 2017, we repaid the entire $291.8 million balance
of Term Loan J under our bank credit facility (the “credit
facility”). This repayment was funded by $231.8 million of
borrowings under our revolving credit commitments and $60.0 million
of capital contributions by our parent, MCC, which, in turn,
received such contributions from Mediacom LLC on the same date. We
recorded a loss on early extinguishment of debt of $2.0 million for
each of the three and six months ended June 30, 2017, which
represented the write-off of unamortized financing costs as a
result of the repayment of Term Loan J.
Bank Credit Facility
As of June 30, 2017, we maintained a $1.085 billion credit
facility, comprising:
• $368.5 million of revolving credit
commitments, which expire on October 10, 2019;
• $140.1 million of outstanding
borrowings under Term Loan A, which mature on January 15,
2021;
• $576.0 million of outstanding
borrowings under Term Loan H, which mature on January 29,
2021;
As of June 30, 2017, we had $60.9 million of unused revolving
credit commitments, all of which were available to be borrowed and
used for general corporate purposes, after giving effect to
approximately $297.9 million of outstanding loans and $9.7 million
of letters of credit issued thereunder to various parties as
collateral.
The credit facility is collateralized by our ownership interests in
our operating subsidiaries and is guaranteed by us on a limited
recourse basis to the extent of such ownership interests. As of
June 30, 2017, the credit agreement governing the credit
facility (the “credit agreement”) required our
operating subsidiaries to maintain a total leverage ratio (as
defined in the credit agreement) of no more than 5.0 to 1.0 and an
interest coverage ratio (as defined in the credit agreement) of no
less than 2.0 to 1.0. For all periods through June 30, 2017,
our operating subsidiaries were in compliance with all covenants
under the credit agreement. As of the same date, the credit
agreement allowed for the full or partial repayment of any
outstanding debt under the credit facility at par value at any time
prior to maturity.
Interest Rate Swaps
We have entered into several interest rate exchange agreements
(which we refer to as “interest rate swaps”) with
various banks to fix the variable rate on a portion of our
borrowings under the credit facility to reduce the potential
volatility in our interest expense that may result from changes in
market interest rates. Our interest rate swaps have not been
designated as hedges for accounting purposes, and have been
accounted for on a mark-to-market basis as of, and for the three
and six months ended, June 30, 2017 and 2016. As of
June 30, 2017, we had interest rate swaps that fixed the
variable portion of $600 million of borrowings at a rate of 1.5%,
all of which are scheduled to expire during December 2018.
As of June 30, 2017, the weighted average interest rate on
outstanding borrowings under the credit facility, including the
effect of our interest rate swaps, was 3.6%.
Senior Notes
As of June 30, 2017, we had $500 million of outstanding
senior notes, comprising $200 million of 5 1 2 3 8
Debt Ratings
MCC’s corporate credit ratings are currently Ba3 by
Moody’s, with a positive outlook, and BB by Standard and
Poor’s (“S&P”), with a stable outlook, and
our senior unsecured ratings are currently B2 by Moody’s,
with a positive outlook, and B+ by S&P, with a stable outlook.
There are no covenants, events of default, borrowing conditions or
other terms in the credit agreement or indentures that are based on
changes in our credit rating assigned by any rating agency.
Fair Value
The fair values of our senior notes and outstanding debt under the
credit facility (which were calculated based upon unobservable
inputs that are corroborated by market data that we determine to be
Level 2), were as follows (dollars in thousands):
June 30, December 31,
5 1 2 $ 205,500 $ 205,500
6 3 8 314,967 316,500
Total senior notes $ 520,467 $ 522,000
Bank credit facility $ 1,016,880 $ 1,135,633 |
