Debt and Other Financing Arrangements

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt and Other Financing Arrangements

6. Debt and Other Financing Arrangements

The Company’s debt consists of the following:

(dollars in millions)	June 30, 2024			December 31, 2023
Current portion of long-term debt:
Credit Agreement - Term B-1 Loans	$	5.0		$	5.0
Credit Agreement - Term B-2 Loans		9.6			6.5
Credit Agreement - Term B-3 Loans		2.0			2.0
Paniolo Fiber Assets Financing Arrangement		0.5			0.5
Finance lease liabilities		8.3			6.4
Current portion of long-term debt		25.4			20.4
Long-term debt, less current portion:
Network Receivables Facility		24.8			36.1
CBTS Receivables Facility		210.2			209.9
Credit Agreement - Revolving Credit Facility		47.0			152.5
Credit Agreement - Term B-1 Loans		482.5			485.0
Credit Agreement - Term B-2 Loans		923.4			630.5
Credit Agreement - Term B-3 Loans		196.0			197.0
Various Cincinnati Bell Telephone notes (1)		94.4			95.1
Paniolo Fiber Assets Financing Arrangement		21.1			21.4
Digital Access Ohio Advance		10.3			6.3
Finance lease liabilities		35.8			36.4
		2,045.5			1,870.2
Net unamortized discount		(6.4	)		(5.5	)
Unamortized note issuance costs		(34.6	)		(34.6	)
Long-term debt, less current portion		2,004.5			1,830.1
Total debt	$	2,029.9		$	1,850.5

(1)As of June 30, 2024 and December 31, 2023, the net carrying amount of the Various Cincinnati Bell Telephone notes included an unamortized fair value adjustment recorded on the Company's merger date, September 7, 2021, of $6.5 million and $7.2 million, respectively. The adjustment is amortized over the life of the notes and is recorded as a reduction of interest expense.

Credit Agreement

In May 2024, the Company entered into an amendment (the "Amendment No. 3") to the Credit Agreement to provide for (i) a $300 million incremental increase to the existing Term B-2 Loans (as defined in the Credit Agreement) (the “Incremental Term B-2 Loans”) and (ii) the extension of the maturity date for the commitments under the Company’s Revolving Credit Facility to August 2028. The Incremental Term B-2 Loans are part of the same class of Loans as the existing Term B-2 Loans and have the same terms as such Term B-2 Loans. The proceeds of the Incremental Term B-2 Loans were used (a) to repay the outstanding loans under the Revolving Credit Facility, (b) to repay a portion of borrowings under the Company’s accounts receivable securitization facility, (c) to pay fees, expenses and other transaction costs related to Amendment No. 3 and the transactions contemplated thereby and (d) for working capital and other general corporate purposes. The other material terms, conditions and covenants of the Credit Agreement were unchanged by Amendment No. 3.

As a result of Amendment No.3, the Company incurred deferred financing costs of $2.4 million related to the Incremental Term B-2 Loans and capitalized the amounts as a reduction to the outstanding debt balance. In addition, the Company incurred deferred financing costs of $0.9 million related to the extension of the maturity date of the Revolving Credit Facility to August 2028 and capitalized the amounts to "Other noncurrent assets" on the Condensed Consolidated Balance Sheets as of June 30, 2024.

In June 2024, the Company entered into an amendment (the "Amendment No. 4") to the Credit Agreement to provide for a reduction in the interest rate margin applicable to the Term B-3 Loans under the Credit Agreement. The other material terms, conditions and covenants of the Credit Agreement were unchanged by Amendment No. 4. As a result of Amendment No. 4, the Company incurred deferred financing costs of $0.7 million related to the Term B-3 Loans and capitalized the amounts as a reduction to the outstanding debt balance.

The May and June 2024 amendments were accounted for as modifications of the original Term Loan B-2 and Revolving Credit Facility. Accordingly, no loss was recorded and new financing costs deferred are being amortized over the new and amended maturities of the term loan and revolver.

The Company had $47.0 million of outstanding borrowings on the Credit Agreement’s revolving credit facility, leaving $353.0 million available for borrowings as of June 30, 2024. The revolving credit facility matures in August 2028, and the Term B-1 Loans, Term B-2 Loans and Term B-3 Loans under the Credit Agreement mature in November 2028.

Accounts Receivable Securitization Facility

As of June 30, 2024, the Company had $24.8 million in borrowings and $25.0 million of letters of credit outstanding under the Network Receivables Facility, leaving $0.5 million remaining availability on the total borrowing capacity of $50.3 million. As of June 30, 2024, the Company had $210.2 million in borrowings and $0.2 million of letters of credit outstanding under the CBTS Receivables Facility, leaving $8.2 million remaining availability on the total borrowing capacity of $218.6 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. The Network Receivables Facility is subject to renewal in January 2025 and has a termination date in January 2026. In the first quarter of 2024, the Company executed an amendment to the CBTS Receivables Facility to extend the renewal date of the facility to April 2025 and replace CDOR, the benchmark rate of interest for borrowings denominated in Canadian dollars, with the Canadian Overnight Repo Rate Average ("CORRA"). As a result of the amendment, borrowings denominated in Canadian dollars under the CBTS Receivables Facility will bear interest based on CORRA plus 1.6%. All other material terms and conditions of the CBTS Receivables Facility were unchanged by the amendment.

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. The CBTS Receivables Facility includes an option for CBTSF to sell, rather than borrow against, certain receivables on a non-recourse basis. As of June 30, 2024, there was no outstanding balance for accounts receivable sold.