AT&T Canada amends credit facility, reducing its borrowing base

By Sara Rosenberg

New York, May 2 - AT&T Canada Inc. amended its credit facility, reducing the loan to C$400 million from C$600 million by lowering the revolver size to C$325 million from C$525 million. The C$75 million operating facility was unchanged, according to a company press release.

The amendment requires the Canadian broadband services provider and local exchange carrier company to unwind "a sufficient amount of its cross currency interest rate swaps to generate cash proceeds of at least C$100 million," the release said. Also, "the maximum allowable out-of-the-money mark-to-market position on the Company's hedged position has been set at C$100 million," the release added.

At May 1, 2002, the total amount drawn under the facility was C$200 million. The company will have C$100 million available in borrowings under the revolver after the CRTC price cap decision once a business plan is delivered and approved by lenders representing two-thirds of the amount committed. The business plan must show that the company is in compliance with covenants, the release said. An additional C$100 million will be available under the revolver upon the approval of each lender.

On Feb 22, 2002, Standard & Poor's downgraded the company's senior unsecured debt to BB. On Feb. 27, 2002, Moody's Investors Service downgraded the senior unsecured debt o Ba3 and on March 22, 2002, the senior unsecured debt was lowered again to B3.

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