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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: i(773)i399-8900
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
i☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
i☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
i☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
i☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
iCommon Shares, $1 par value
iUSM
iNew
York Stock Exchange
i6.25% Senior Notes due 2069
iUZD
iNew
York Stock Exchange
i5.50% Senior Notes due 2070
iUZE
iNew
York Stock Exchange
i5.50% Senior Notes due 2070
iUZF
iNew
York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
i☐
Emerging
growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry
into a Material Definitive Agreement
On December 9, 2021 (Effective Date), United States Cellular Corporation (UScellular) entered into a $300 million Senior Term Loan Credit Agreement (Credit Agreement) by and among UScellular as Borrower, Toronto Dominion (Texas) LLC as Administrative Agent, and the other lenders party thereto and identified therein.
The Credit Agreement provides UScellular with a $300 million senior term loan credit facility for general corporate purposes and to support UScellular's 5G deployment, including spectrum acquisition.
Borrowings under the Credit Agreement bear interest, at UScellular’s option, either at a secured overnight financing rate (SOFR) or at an alternative base rate, plus,
in each case, an applicable margin.
The two financial covenants described below are included in the Credit Agreement:
1.Consolidated Interest Coverage Ratio (the ratio of Consolidated EBITDA to Consolidated Interest Charges) may not be less than 3.00 to 1.00 as of the end of any fiscal quarter.
2.Consolidated Leverage Ratio (the ratio of Consolidated Funded Indebtedness to Consolidated EBITDA) may not be greater than 3.75 to 1.00 as of the end of any fiscal quarter.
The term loan under the Credit Agreement is unsecured, subject to certain limitations. Additionally, certain wholly-owned subsidiaries
are guarantors under the Credit Agreement.
The Credit Agreement includes representations and warranties, covenants, events of default and other terms and conditions that are substantially similar to UScellular’s existing term loan and revolving credit agreements.
A Change in Control, as such term is defined in the Credit Agreement, of UScellular would constitute a default and would enable the required lenders and the Administrative Agent to require all borrowings outstanding under the Credit Agreement to be repaid.
The continued availability of the Credit Agreement requires UScellular to comply with certain negative and affirmative covenants, maintain the above financial ratios and provide representations on certain matters at the time of each borrowing.
The
Credit Agreement permits UScellular to make one or more borrowings aggregating up to $300 million from the Effective Date through the three-month anniversary of the Effective Date, or March 9, 2022.
Amounts borrowed under the Credit Agreement will be due and payable in quarterly installments at a rate of 0.625% of the initial outstanding principal balance from March 2023 through December 2023; at a rate of 1.25% of the initial outstanding principal balance from March 2024 through December 2025; and at a rate of 2.50% of the initial outstanding principal balance from March 2026 through maturity date. The remaining unpaid balance will be due and payable in full on July 20, 2026.
The foregoing brief description is qualified
by reference to the copy of the Credit Agreement attached hereto as Exhibit 4.1, which is incorporated herein by reference, and which identifies all the lenders thereto.
Some of the lenders and/or agents under the Credit Agreement and/or their affiliates may have various relationships with UScellular, its parent, Telephone and Data Systems, Inc. (TDS), and their subsidiaries involving banking or other financial services, including checking, cash management, brokerage, lending, investment banking, depository, indenture trustee and/or other services, including serving as a lender under the Credit Agreement
or other TDS and/or UScellular credit agreements.
In connection with the Credit Agreement, UScellular, TDS and Toronto Dominion (Texas) LLC entered into a Subordination Agreement on December 9, 2021, the form of which is attached as Exhibit F to the Credit Agreement. Pursuant to this Subordination Agreement, (a) any consolidated funded indebtedness from UScellular to TDS will be unsecured and (b) any (i) consolidated funded indebtedness (other than Refinancing Indebtedness as defined in the Credit Agreement) in excess of $105 million, and (ii) Refinancing Indebtedness in excess of $250 million, will be subordinated and made junior in right of payment to the prior payment in full of obligations to the lenders under the Credit Agreement. As of the date of this Form 8-K, there is no outstanding funded indebtedness of UScellular that is
subordinated pursuant to the Subordination Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The disclosure set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
