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CBB > SEC Filings for CBB > Form 8-K on 21-Nov-2012All Recent SEC Filings

Show all filings for CINCINNATI BELL INC

Form 8-K for CINCINNATI BELL INC


21-Nov-2012

Entry into a Material Definitive Agreement, Termination of a Material Definit


ITEM 1.01 Entry into a Material Definitive Agreement.

Notes Offering

Indenture
On November 20, 2012, Cincinnati Bell Inc. (the "Company") announced that its wholly-owned subsidiaries CyrusOne LP and CyrusOne Finance Corp. (the "Issuers") closed their previously announced offering of $525 million aggregate principal amount of 6.375% Senior Notes due 2022 (the "Notes"). The Notes were issued pursuant to an indenture dated as of November 20, 2012 (the "Indenture"), among the Issuers, the guarantors party thereto and Wells Fargo Bank, N.A., as trustee. The Company is filing the Indenture as Exhibit 4.1 to this report. The Notes are senior unsecured obligations of the Issuers, which rank equally in right of payment with all existing and future unsecured senior debt of the Issuers. The Notes will be effectively subordinated to all existing and future secured indebtedness of the Issuers to the extent of the value of the assets securing such indebtedness. The Notes will be guaranteed on a joint and several basis by the Company's wholly-owned subsidiary CyrusOne Inc. and certain of its subsidiaries. Each such guarantee will be a senior unsecured obligation of the applicable guarantor, ranking equally with all existing and future unsecured senior debt of such guarantor and effectively subordinated to all existing and future secured indebtedness of such guarantor to the extent of the value of the assets securing that indebtedness. The Notes will be structurally subordinated to all liabilities (including trade payables) of each subsidiary of the Issuers that does not guarantee the Notes.
The Notes will bear interest at a rate of 6.375% per annum, payable semi-annually on May 15 and November 15 of each year, beginning on May 15, 2013, to persons who are registered holders of the Notes on the immediately preceding May 1 and November 1, respectively.
The Indenture limits the ability of CyrusOne LP and its restricted subsidiaries to incur indebtedness, encumber their assets, enter into sale and leaseback transactions, make restricted payments, create dividend restrictions and other payment restrictions that affect CyrusOne LP's restricted subsidiaries, permit restricted subsidiaries to guarantee certain indebtedness, enter into transactions with affiliates and sell assets, in each case subject to certain qualifications set forth in the Indenture. The indenture also restricts the business activities of CyrusOne Inc., CyrusOne GP and CyrusOne Finance Corp. In the event of a Change of Control (as defined in the Indenture), holders of the Notes will have the right to require the Issuers to repurchase all or any part of the Notes at a purchase price equal to 101% of the principal amount of Notes, plus accrued and unpaid interest, if any, to the date of such repurchase. The Notes will mature on November 15, 2022. However, prior to November 15, 2017, the Issuers may, at their option, redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes, together with accrued and unpaid interest, if any, plus a "make-whole" premium. On or after November 15, 2017, the Issuers may, at their option, redeem some or all of the Notes at any time at declining redemption prices equal to (i) 103.188% beginning on November 15, 2017, (ii) 102.125% beginning on November 15, 2018,
(iii) 101.063% beginning on November 15, 2019 and (iv) 100.000% beginning on November 15, 2020 and thereafter, plus, in each case, accrued and unpaid interest, if any, to the applicable redemption date. In addition, before November 15, 2015, and subject to certain conditions, the Issuers may, at their option, redeem up to 35% of the aggregate principal amount of Notes with the net proceeds of certain equity offerings at 106.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption; provided that (i) at least 65% of the aggregate principal amount of Notes remains outstanding and (ii) the redemption occurs within 90 days of the closing of any such equity offering. The above description of the Indenture does not purport to be a complete statement of the parties' rights and obligations under the Indenture and is qualified in its entirety by reference to the terms of the Indenture, a copy of which is attached hereto as Exhibit 4.1 and incorporated herein by reference. The Notes and the related guarantees have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Registration Rights Agreement
On November 20, 2012, the Issuers entered into a registration rights agreement relating to the Notes, by and among the Issuers, the guarantors party thereto and Barclays Capital Inc. as representative of the initial purchasers of the Notes (the


"Registration Rights Agreement"). The Registration Rights Agreement requires the Issuers, at their cost, to use their commercially reasonable efforts to, among other things: (i) file and cause to become effective a registration statement with respect to the Notes to be used in connection with the exchange of the Notes for notes with substantially identical terms in all material respects (including the applicable guarantees) except for the transfer restrictions relating to the Notes (the "exchange offer"); and (ii) upon the effectiveness of the applicable registration statement, commence the exchange offer. In addition, under certain circumstances, the Issuers may be required to file a shelf . . .



ITEM 1.02 Termination of a Material Definitive Agreement.

On November 20, 2012, the Company used a portion of the amounts received from the repayment of intercompany debt by CyrusOne LP to repay all outstanding borrowings and terminate the Company's previous revolving credit facility established pursuant to a credit agreement, dated as of June 11, 2010 (as amended on October 31, 2011) by and among the Company, as borrower, Bank of America, N.A. as administrative agent, certain subsidiaries of the Company as guarantors, and the financial institutions parties thereto as lenders.



ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.



ITEM 8.01 - OTHER EVENTS
Redemption and Satisfaction and Discharge of 2015 Notes On November 20, 2012, the Company delivered a notice to The Bank of New York Mellon, as trustee under the Indenture dated as of February 16, 2005 (the "2005 Indenture"), among the Company, the guarantors party thereto and the trustee, governing the Company's 7.000% Senior Notes due 2015 (the "2015 Notes"), notifying the trustee of its election to redeem (the "2015 Notes Redemption") on December 19, 2012 (the "2015 Notes Redemption Date") all of the outstanding


2015 Notes, at a redemption price of 101.167% of the principal amount of the 2015 Notes together with accrued and unpaid interest to the 2015 Notes Redemption Date. Simultaneously with the delivery of such notice, the Company delivered and irrevocably deposited funds with the trustee in connection with the satisfaction and discharge of the Company's obligations under the 2005 Indenture (the "Discharge"), and the trustee has acknowledged such Discharge in accordance with the terms of the 2005 Indenture. The Company has instructed the trustee to provide notice of the 2015 Notes Redemption and the Discharge to holders of the 2015 Notes. The 2015 Notes Redemption and the Discharge will be made pursuant to the terms of the 2005 Indenture and will be made with a portion of the funds received from the repayment of intercompany debt by CyrusOne LP. Redemption of Cincinnati Bell Telephone 2023 Notes On November 20, 2012, Cincinnati Bell Telephone Company LLC, an Ohio limited liability company and a wholly-owned subsidiary of the Company ("CBT"), instructed The Bank of New York Mellon, as trustee, to provide notice to the holders of its 7.20% Guaranteed Medium-Term Notes due 2023, 7.25% Guaranteed Medium-Term Notes due 2023, 7.27% Guaranteed Medium-Term Notes due 2023 and 7.18% Guaranteed Medium-Term Notes due 2023 (collectively, the "2023 Notes") under the Indenture governing the 2023 Notes dated as of October 27, 1993 (the "1993 Indenture"), among CBT, the Company, as guarantor, and the trustee, notifying such holders of CBT's election to redeem (the "2023 Notes Redemption") on December 19, 2012 (the "2023 Notes Redemption Date"), all of the outstanding 2023 Notes. The 2023 Notes will be redeemed at redemption prices ranging between 100.3590% and 100.3625% of the principal amount of the applicable series of 2023 Notes together with accrued and unpaid interest to the 2023 Notes Redemption Date. The 2023 Notes Redemption will be made pursuant to the terms of the 1993 Indenture and will be made with a portion of the funds received from the repayment of intercompany debt by CyrusOne LP.

Tender Offers

On November 20, 2012, Cincinnati Bell Inc. accepted for purchase approximately $91 million aggregate principal amount of its 2020 Notes (as defined below) tendered in connection with its previously announced cash tender offers for its 8.375% Senior Notes due 2020 (CUSIP No. 171871AN6) (the "2020 Notes") and its 8.25% Senior Notes due 2017 (CUSIP No. 171871AL0) (the "2017 Notes" and, together with the 2020 Notes, the "Notes"). The 2020 Notes accepted for payment were all tendered on or prior to 5:00 p.m., ET on November 9, 2012 (the "Early Tender Date").

Acceptance of Notes for purchase was subject to a maximum purchase price of $100 million, acceptance priorities and proration, all as described in the Offer to Purchase and related Letter of Transmittal. The 2020 Notes had a higher purchase priority than the 2017 Notes and therefore, due to the maximum purchase price, Cincinnati Bell did not accept for purchase any 2017 Notes and does not expect to accept for purchase any Notes tendered after the Early Tender Date.

Holders who validly tendered their 2020 Notes on or before the early tender date and whose 2020 Notes were accepted for purchase received total consideration of $1,097.50 per $1,000 principal amount of 2020 Notes, including an early tender premium of $30.00 per $1,000 principal amount of 2020 Notes, subject to the terms and conditions set forth in the Offer to Purchase and related Letter of Transmittal.

This report does not constitute a notice of redemption under the optional redemption provisions of either of the indentures governing the 2020 Notes or the 2017 Notes, nor does it constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.

Payoff and Termination Agreement

On November 20, 2012, the Company and CyrusOne LP entered into a payoff and termination agreement (the "Payoff and Termination Agreement") pursuant to which CyrusOne LP repaid $480 million of intercompany debt owed by CyrusOne LP and its subsidiaries to the Company and its subsidiaries.

Contribution Agreements

On November 20, 2012, certain subsidiaries of the Company (the "Contributors") entered into contribution agreements (the "Contribution Agreements") with CyrusOne LP, pursuant to which, on November 20, 2012, the Contributors contributed direct or indirect interests in a portfolio of properties and certain other assets related to such properties to CyrusOne LP in exchange for units of limited partnership interest in CyrusOne LP and the assumption of liabilities by CyrusOne LP. The


aggregate historical combined net tangible book value of the properties and assets contributed to CyrusOne LP by the Contributors was approximately $690 million as of September 30, 2012.

The Contribution Agreements provide that CyrusOne LP assumed or succeeded to all of the Contributors' rights, liabilities and obligations with respect to the property entity, properties interests and assets contributed. The Contribution Agreements contain customary representations and warranties by the Contributors with respect to the property entity, property interests and assets contributed to CyrusOne LP, such as title to any owned property, compliance with laws (including environmental laws), enforceability of certain material contracts and leases and certain other matters. In the event of a breach of such representations and warranties, the Contributors will indemnify CyrusOne LP for any resulting losses.

No Contributor will be liable unless and until the amount of losses exceeds 1% of the aggregate value of the units of limited partnership interest in CyrusOne LP received by the Contributor that contributed the property to which such losses relate. The liability of each Contributor will be limited to 10% of the aggregate value of the units of limited partnership interest in CyrusOne LP received by such Contributor in connection with the contribution transactions, and, with respect to any liability that arises from a specific contributed property, such indemnification will be limited to 10% of the aggregate value of the units of limited partnership interest in CyrusOne LP issued in respect of such contributed property. The foregoing limitations on the Contributors' indemnification obligations will not apply to the Contributors' representations and warranties with respect to title to any owned property contributed to CyrusOne LP until such time as CyrusOne LP obtains title insurance policies with respect to such properties.

The representations and warranties made by the Contributors will survive for a period of one year after the closing of the contribution transactions. In the event CyrusOne LP does not become aware of a breach until after such period, or if CyrusOne LP otherwise fails to assert a claim prior to the end of such period, CyrusOne LP will have no further recourse against the Contributors.

The above description is only a summary of the Contribution Agreements and is qualified in its entirety by reference to the provisions of the Contribution Agreements, copies of which are attached hereto as Exhibits 10.3 and 10.4 and are incorporated herein by reference.

Designation of Unrestricted Subsidiaries

On November 20, 2012, the Company designated CyrusOne Inc., Data Centers South Holdings LLC and Data Center Investments Holdco LLC as unrestricted subsidiaries in compliance with (i) its indenture dated as of October 5, 2009, under which its 8.250% Senior Notes due 2017 were issued, (ii) its indenture dated as of March 15, 2010, under which its 8.750% Senior Subordinated Notes due 2018 were issued, and (iii) its indenture dated as of October 13, 2010, under which its 8.375% Senior Notes due 2020 were issued. Therefore, these entities and their subsidiaries will no longer be subject to most of the covenants contained in such indentures.




ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits

Exhibit No.       Description

    4.1           Indenture, dated as of November 20, 2012, by and among CyrusOne LP
                  and CyrusOne Finance Corp., guarantors party thereto and Wells
                  Fargo Bank, N.A., as trustee.
    4.2           Registration Rights Agreement dated November 20, 2012, between
                  CyrusOne LP, CyrusOne Finance Corp., the guarantors party thereto
                  and Barclays Capital Inc., as representatives of the initial
                  purchasers.
   10.1           Credit Agreement dated as of November 20, 2012, among Cincinnati
                  Bell Inc., an Ohio corporation, the Lenders party thereto and Bank
                  of America, N.A.
   10.2           Credit Agreement dated as of November 20, 2012, among CyrusOne
                  Inc., a Maryland corporation, CyrusOne LP, a Maryland limited
                  partnership, the Lenders party thereto and Deutsche Bank Trust
                  Company Americas.
   10.3           Contribution Agreement dated as of November 20, 2012, by and among
                  CyrusOne LP, a Maryland limited partnership and Data Center
                  Investments Inc., a Delaware corporation
   10.4           Contribution Agreement dated as of November 20, 2012, by and among
                  CyrusOne LP, a Maryland limited partnership and Data Centers
                  South, Inc., a Delaware corporation


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