Long-Term Debt and Revolving Promissory Note

Long-term debt, including unamortized discounts and premiums and note payable - affiliate, is summarized as follows:



	Interest Rates	Maturities	As of September 30, 2015			As of December 31, 2014
			(Dollars in millions)
Senior notes	6.125% - 8.375%	2016 - 2055	$	7,629		7,311
Term loan	1.950%	2025	100			—
Capital lease and other obligations	Various	Various	14			32
Unamortized premiums, net			21			36
Total long-term debt			7,764			7,379
Less current maturities			(644		)	(117	)
Long-term debt, excluding current maturities			$	7,120		7,262
Note payable - affiliate	6.658%	2022	$	827		796

New Issuance

On September 21, 2015, we issued $400 million aggregate principal amount of 6.625% Notes due 2055, in exchange for net proceeds, after deducting underwriting discounts and other expenses, of approximately $386 million. The underwriting agreement included an over-allotment option granting the underwriters for the offering an opportunity to purchase additional 6.625% Notes due 2055. On September 30, 2015, we issued an additional $10 million aggregate principal amount of the 6.625% Notes under this over-allotment option. All of the 6.625% Notes are unsecured obligations and may be redeemed by us, in whole or in part, on or after September 15, 2020, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

Repayment

On June 15, 2015, we paid at maturity the $92 million principal amount of our 7.625% Notes.

Term Loan

On February 20, 2015, we entered into a term loan in the amount of $100 million with CoBank, ACB. The outstanding unpaid principal amount of this term loan plus any accrued and unpaid interest is due on February 20, 2025. Interest is paid monthly based upon either the London Interbank Offered Rate (“LIBOR”) or the base rate (as defined in the credit agreement) plus an applicable margin between 1.50% to 2.50% per annum for LIBOR loans and 0.50% to 1.50% per annum for base rate loans depending on our then current senior unsecured long-term debt rating. As of September 30, 2015, the outstanding principal balance on this term loan was $100 million.

Revolving Promissory Note

We are currently indebted to an affiliate of our ultimate parent company, CenturyLink, under a revolving promissory note that provides us with a funding commitment of up to $1.0 billion aggregate principal amount through June 30, 2022, of which $827 million was outstanding as of September 30, 2015. As of September 30, 2015, the weighted average interest rate was 6.658%. As of September 30, 2015 and December 31, 2014, this revolving promissory note is reflected on our consolidated balance sheets as a current liability under note payable - affiliate. As of September 30, 2015, $18 million of accrued interest is reflected in other current liabilities on our consolidated balance sheet. In accordance with the note agreement, all accrued interest and unpaid interest is capitalized to the unpaid principal balance on June 1 and December 1 of each year.

Covenants

The indentures governing our notes contain certain covenants including, but not limited to: (i) a prohibition on certain liens on our assets; and (ii) a limitation on mergers or sales of all, or substantially all, of our assets, which limitation requires that a successor assume the obligation with regard to these notes. These indentures do not contain any cross-default provisions.

Our senior notes were issued under indentures dated April 15, 1990 and October 15, 1999. These indentures do not contain any financial covenants, but do include restrictions that limit our ability to (i) incur, issue or create liens upon our property and (ii) consolidate with or merge into, transfer or lease all or substantially all of our assets to any other party.

As of September 30, 2015, we believe we were in compliance with the provisions and covenants of our debt agreements.

Subsequent Events

On October 13, 2015, we redeemed all $250 million of our 7.200% Notes due 2026, which resulted in an immaterial gain.

On October 13, 2015, we redeemed $150 million of our 6.875% Notes due 2033, which resulted in an immaterial loss.