Qwest gets $750 million loan

Fiber Optics Weekly Update, Sept 13, 2002

Qwest Communications announced it has reached a unanimous agreement with the 29 lenders in its syndicated credit facility to amend the company's $3.4 billion credit facility. In addition, Qwest has completed a new $750 million term loan at the company's QwestDex Inc. subsidiary. Both agreements are effective immediately.

"We're very pleased to take these additional steps to strengthen the company's financial position," said Oren Shaffer, Qwest vice chairman and CFO. "Coupled with the pending sale of QwestDex, these actions announced and the cash flow from our operations should provide us with enough funding for the next several years, and put any liquidity concerns behind us."

Under the amendment, the maturity of the bank facility has been extended from May 2003 to May 2005, and the financial covenants have been relaxed, increasing the maximum debt to consolidated EBITDA ratio from 4.0 at the end of 2002 to 6.0 throughout the term of the agreement. Qwest has pledged the stock of Qwest Corporation as security for the existing facility, and granted secondary liens on the stock and certain assets of QwestDex. Qwest is required to use a portion of the proceeds from the sale of the first phase of QwestDex to pay clown this facility to $2 billion. At the time of completion of the second phase of the QwestDex sale, the facility must be paid down to $1.25 billion. As previously announced, the sale of QwestDex is subject to certain closing conditions.

The company's QwestDex subsidiary obtained a $750 million term loan due in 2004. The loan is secured by a lien on the stock and certain assets of QwestDex, and a secondary lien on Qwest Corporation stock. Qwest must pay down this facility by the completion of the second phase of its sale of QwestDex, expected in 2003.