Debt and Other Financing Arrangements

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt and Other Financing Arrangements

5. Debt and Other Financing Arrangements

The Company’s debt consists of the following:

(dollars in millions)	March 31, 2023			December 31, 2022
Current portion of long-term debt:
Credit Agreement - Term B-1 Loans	$	5.0		$	5.0
Credit Agreement - Term B-2 Loans		6.5			6.5
7 1/4% Notes due 2023 (1)		22.5			22.8
Paniolo Fiber Assets Financing Arrangement		0.5			0.5
Other financing arrangements		0.1			0.3
Finance lease liabilities		10.6			9.9
Current portion of long-term debt		45.2			45.0
Long-term debt, less current portion:
Receivables Facility		—			186.9
Network Receivables Facility		35.5			—
CBTS Receivables Facility		198.8			—
Credit Agreement - Revolving Credit Facility		300.0			223.0
Credit Agreement - Term B-1 Loans		488.8			490.0
Credit Agreement - Term B-2 Loans		635.4			637.0
Various Cincinnati Bell Telephone notes (1)		96.0			96.4
Paniolo Fiber Assets Financing Arrangement		21.7			21.8
Digital Access Ohio Advance		3.7			0.9
Other financing arrangements		0.4			—
Finance lease liabilities		42.6			43.1
		1,822.9			1,699.1
Net unamortized discount		(4.1	)		(4.3	)
Unamortized note issuance costs		(37.3	)		(38.8	)
Long-term debt, less current portion		1,781.5			1,656.0
Total debt	$	1,826.7		$	1,701.0

(1)As of March 31, 2023, the net carrying amounts of the 7 ¼% Notes due 2023 and Various Cincinnati Bell Telephone notes included unamortized fair value adjustments recorded on the Company's merger date, September 7, 2021, of $0.2 million and $8.1 million, respectively. As of December 31, 2022, the net carrying amounts of the 7 ¼% Notes due 2023 and Various Cincinnati Bell Telephone notes included unamortized fair value adjustments of $0.5 million and $8.5 million, respectively. Each adjustment is being amortized over the life of the respective notes and is recorded as a reduction of interest expense.

Credit Agreement

The Company had $300.0 million of outstanding borrowings on the Credit Agreement’s revolving credit facility, leaving $100.0 million available for borrowings as of March 31, 2023. The revolving credit facility matures in September 2026, and the Term B-1 Loans and Term B-2 loans under the Credit Agreement mature in November 2028.

In May 2023, the Company entered into an Incremental Amendment to the Credit Agreement (the "Incremental Amendment”) to provide for the incurrence of a new tranche of $200.0 million senior secured term loans (the “Term B-3 Loans”). The Term B-3 Loans will mature in November 2028 and will bear interest at a floating rate plus a margin equal to (x) 3.00% for Term B-3 Loans bearing interest based on the Base Rate (as defined in the Credit Agreement) and (y) 4.00% for Term B-3 Loans bearing interest based on Term SOFR. All other material terms, conditions and covenants of the Credit Agreement were unchanged by the Incremental Amendment.

Accounts Receivable Securitization Facility

On January 31, 2023, the Company, together with certain of its U.S. and Canadian subsidiaries, made certain amendments (the “Amendments”) to the Company’s accounts receivable securitization facility ("Receivables Facility"). The Amendments amend the Receivables Facility to, among other things: (i) increase the total maximum borrowing capacity to $280.0 million, (ii) separate the Receivables Facility into two separate facilities, with (A) the existing Receivables Facility (the “Network Receivables Facility”), as amended by the Amendments, covering receivables originated by certain U.S. subsidiaries of the Company including Cincinnati Bell Telephone Company LLC, Hawaiian Telcom Communications, Inc. and certain of their respective subsidiaries having a maximum borrowing capacity of $55.0 million and (B) a new facility (the “CBTS Receivables Facility”) covering receivables originated by certain U.S. and Canadian subsidiaries in the Company's IT Services and Hardware segment including CBTS Technology Solutions LLC and OnX Enterprise Solutions Ltd. having a maximum borrowing capacity of $225.0 million, (iii) move the receivables monetization arrangements from the Network Receivables Facility to the CBTS Receivables Facility, and (iv) make applicable technical and conforming changes thereto. In addition, the Amendments extend the renewal dates of each facility to January 2025 and the termination dates of each facility to January 2026.

As of March 31, 2023, the Company had $35.5 million in borrowings and $15.3 million of letters of credit outstanding under the Network Receivables Facility, leaving $4.2 million remaining availability on the total borrowing capacity of $55.0 million. As of March 31, 2023, the Company had $198.8 million in borrowings and $0.8 million of letters of credit outstanding under the CBTS Receivables Facility, leaving $13.6 million remaining availability on the total borrowing capacity of $213.2 million. The maximum borrowing limit for loans and letters of credit under the Network Receivables Facility and the CBTS Receivables Facility is $55.0 million and $225.0 million, respectively, in the aggregate. The available borrowing capacity on each facility is calculated monthly based on the quantity and quality of outstanding accounts receivable, and thus may be lower than the maximum borrowing limit.

Under the Network Receivables Facility and the CBTS Receivables Facility, certain U.S. and Canadian subsidiaries, as originators, sell their respective trade receivables on a continuous basis to Cincinnati Bell Funding LLC (“CBF”), Cincinnati Bell Funding Canada Ltd. ("CBFC"), or CBTS Funding LLC (“CBTSF”), wholly-owned consolidated subsidiaries of the Company. Although CBF, CBFC and CBTSF are wholly-owned consolidated subsidiaries of the Company, CBF, CBFC and CBTSF are legally separate from the Company and each of the Company’s other subsidiaries. Upon and after the sale or contribution of the accounts receivable to CBF, CBFC or CBTSF, such accounts receivable are legally assets of CBF, CBFC and CBTSF and, as such, are not available to creditors of other subsidiaries or the parent company. As a result of the Amendments, the CBTS Receivables Facility includes an option for CBTSF to sell, rather than borrow against, certain receivables on a non-recourse basis. As of March 31, 2023, the outstanding balance of certain accounts receivable sold, rather than borrowed against, was $19.1 million.