Item 1.01. Entry into a Material Definitive Agreement.
On January 15, 2021, Consolidated Communications Holdings, Inc. (the “Company”), its wholly owned subsidiary, Consolidated Communications, Inc. (“CCI”), as borrower, JPMorgan Chase Bank, N.A., as incremental term loan lender, and Wells Fargo Bank, National Association, as administrative agent, entered into an Amendment No. 1 (the “Credit Agreement Amendment”) to the Company’s existing Credit Agreement, dated as of October 2, 2020 (the “Existing Credit Agreement” and, as amended by the Credit Agreement Amendment, the “Amended Credit Agreement”), among the Company, CCI, Wells Fargo Bank, National Association, as administrative agent, and the other parties party thereto. Pursuant to the Existing Credit Agreement, CCI has borrowed term loans in the aggregate principal amount of $1.25 billion (the “Existing Term Loans”) and has access to a $250 million revolving credit facility. The Existing Credit Agreement also provides CCI with the ability to borrow or incur, subject to certain terms and conditions, incremental loans or incremental revolving facilities under the Existing Credit Agreement in an aggregate amount of up to the greater of (a) $300 million plus (b) an amount which would not cause its senior secured leverage ratio to exceed 3.70 to 1.00 on a pro forma basis.
On January 15, 2021, pursuant to the Credit Agreement Amendment, CCI borrowed an additional $150,000,000 aggregate principal amount of incremental term loans (the “Incremental Term Loans”). The Incremental Term Loans have terms identical to the Existing Term Loans, including as to the maturity date of October 2, 2027. Consistent with the Existing Term Loans, the Incremental Term Loans bear interest at a rate equal to LIBOR or base rate, at CCI’s option, plus an applicable margin of 4.75% for LIBOR loans, or 3.75% for base rate loans (with a LIBOR floor equal to 1%). The Existing Term Loans and the Incremental Term Loans will collectively comprise a single class of term loans under the Amended Credit Agreement.
Proceeds from the borrowings of the Incremental Term Loans will be used for working capital and other general corporate purposes of the Company, CCI and its subsidiaries.
The foregoing description of the Credit Agreement Amendment is not complete and is qualified in its entirety by reference to the full text of the Credit Agreement Amendment, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.