Note 8 Debt

Revolving Credit Facilities

U.S. Cellular has a revolving credit facility available for general corporate purposes. In June 2016, U.S. Cellular entered into a new $300 million revolving credit agreement with certain lenders and other parties. As a result of the new agreement, U.S. Cellular’s revolving credit agreement due to expire in December 2017 was terminated. Amounts under the new revolving credit facility may be borrowed, repaid and reborrowed from time-to-time until maturity in June 2021. As of June 30, 2016, there were no outstanding borrowings under the revolving credit facility, except for letters of credit. Interest expense primarily associated with the unused commitment fees on the revolving line of credit was immaterial for each of the six months ended June 30, 2016 and 2015.

The following table summarizes the terms of the revolving credit facility as of June 30, 2016:

(Dollars in millions)
Maximum borrowing capacity		$	300
Letters of credit outstanding		$	17
Amount borrowed		$	–
Amount available for use		$	283
Illustrative borrowing rate: One-month London Interbank Offered Rate ("LIBOR") plus contractual spread1			2.18%
	Illustrative LIBOR Rate		0.43%
	Contractual spread		1.75%
Commitment fees on amount available for use2			0.30%

Agreement date			June 2016
Maturity date			June 2021

1	Borrowings under the revolving credit facility bear interest either at a LIBOR rate or at an alternative Base Rate as defined in the revolving credit agreement, plus an applicable margin, at U.S. Cellular’s option. U.S. Cellular may select a borrowing period of either one, two, three or six months (or other period of twelve months or less if requested by U.S. Cellular and approved by the lenders).

2	The revolving credit facility has commitment fees based on the unsecured senior debt ratings assigned to U.S. Cellular by certain ratings agencies.

The new revolving credit agreement includes the following financial covenants:

Consolidated Interest Coverage Ratio may not be less than 3.00 to 1.00 as of the end of any fiscal quarter.
Consolidated Leverage Ratio may not be greater than the ratios indicated as of the end of any fiscal quarter for each period specified below:

	Period	Ratios

	From the agreement date of June 15, 2016 through June 30, 2019	3.25 to 1.00

	From July 1, 2019 and thereafter	3.00 to 1.00

Certain U.S. Cellular wholly-owned subsidiaries have jointly and severally unconditionally guaranteed the payment and performance of the obligations of U.S. Cellular under the revolving credit agreement pursuant to a guaranty dated June 15, 2016. Other subsidiaries that meet certain criteria will be required to provide a similar guaranty in the future. U.S. Cellular believes it was in compliance with all of the financial and other covenants and requirements set forth in the revolving credit facility as of June 30, 2016.

At June 30, 2016, U.S. Cellular had recorded $3 million of unamortized debt issuance costs related to the revolving credit facility which is included in Other assets and deferred charges in the Consolidated Balance Sheet. Included in that amount was $2 million related to the new revolving credit facility.

Term Loan

In June 2016, U.S. Cellular also amended and restated its senior term loan credit facility. Certain modifications were made to the financial covenants and subsidiary guarantees were added in order to align with the new revolving credit agreements. There were no significant changes to the maturity date or other key terms of the agreement.