8-KMaterial AgreementsFinancial EventsExhibits & Filings

CROWN CASTLE INC. 8-K Report, Material Agreement (Dec 28, 2009)

Filed December 28, 2009For Securities:CCI

Summary

Crown Castle International Corp. (CCI) filed an 8-K on December 28, 2009, detailing significant amendments to its Credit Agreement. The company successfully increased its revolving credit commitments to $400 million, extending the maturity date from January 5, 2010, to September 30, 2013. This move provides enhanced financial flexibility and a longer runway for its operations. Furthermore, the amendments included a reduction in key financial covenant levels, specifically the Consolidated Leverage Ratio, from 8.25:1.00 to 7.50:1.00, and a stricter ratio of 7.00:1.00 for restricted payments. The company also entered into interest rate swap agreements totaling $600 million to hedge against interest rate volatility, effectively converting LIBOR-based payments on its term loan to a fixed rate of approximately 1.25% until December 31, 2011. These actions signal a proactive approach to managing its debt structure and financial risk.

Key Highlights

  • 1Increased revolving credit facility to $400 million.
  • 2Extended the maturity date of revolving commitments to September 30, 2013.
  • 3Reduced Consolidated Leverage Ratio financial covenant from 8.25:1.00 to 7.50:1.00.
  • 4Lowered Consolidated Leverage Ratio for restricted payments to 7.00:1.00.
  • 5Entered into $600 million in interest rate swap agreements to hedge interest rate risk.
  • 6Secured a fixed interest rate of approximately 1.25% on a portion of its term loan debt until December 31, 2011.
  • 7The amendments are subject to lender consent and expected to be implemented by January 5, 2010.

Frequently Asked Questions

The main purpose of this filing is to report on material amendments to Crown Castle International Corp.'s Credit Agreement. These amendments include an increase in the revolving credit facility, an extension of its maturity date, adjustments to financial covenants, and the execution of new interest rate swap agreements.

The increase in the revolving credit facility to $400 million and the extension of its maturity date to September 30, 2013, provides the company with greater financial flexibility and liquidity. This allows for more strategic financial planning and operational execution over a longer period.

The reduction in the Consolidated Leverage Ratio from 8.25:1.00 to 7.50:1.00 (and 7.00:1.00 for restricted payments) indicates that the company is aiming to operate with lower leverage. This could signal a commitment to deleveraging or a more conservative financial management approach, potentially enhancing investor confidence in its ability to manage debt.

The $600 million in interest rate swap agreements serve to hedge against interest rate volatility. By converting variable LIBOR-based interest payments on its term loan to a fixed rate of approximately 1.25% until December 31, 2011, the company locks in a predictable interest expense, reducing financial risk and improving budget certainty.