SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: July 6, 2000
(Date of earliest event reported) June 22, 2000
DOBSON COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
OKLAHOMA 000-29225 73-1110531
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
13439 North Broadway Extension, Suite 200
Oklahoma City, Oklahoma 73114
(Address of principal executive offices) (Zip Code)
(405) 529-8500
(Registrant's telephone number, including area code)
INFORMATION TO BE INCLUDED IN THE REPORT
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Item 5. OTHER EVENTS
Offering of 10-7/8% Senior Notes
On June 22, 2000, Dobson Communications Corporation (the
"Company") successfully completed a private offering under Rule
144A and Regulation S of $300 million of 10-7/8% senior notes due
2010. Net proceeds from the offering will be used to pay down
existing bank debt and for general corporate purposes. The
unsecured notes rank pari passu in right of payment with any of
the Company's existing and future senior indebtedness and are
senior to all existing and future subordinated debt. The senior
notes are not registered under the Securities Act of 1933, and
may not be offered or sold in the United States absent
registration or any applicable exemption from registration.
Within 180 days from the issue date, the Company will complete an
offer to exchange the senior notes for a new issue of identical
debt securities registered under the Securities Act.
Indenture
In connection with the closing of the sale of the senior
notes, an indenture dated June 22, 2000 (the "Indenture") was
entered into between the Company and United States Trust Company
of New York, as Trustee. The Indenture contains certain
covenants including, but not limited to, covenants that:
o limit the ability of the Company and its restricted
subsidiaries to incur indebtedness;
o limit the ability of the Company and its restricted
subsidiaries to assume liens;
o limit the ability of the Company and its restricted
subsidiaries to make restricted payments;
o limit the ability of the Company and its restricted
subsidiaries to pay dividends and impose payment restrictions
affecting its restricted subsidiaries;
o limit the ability of the Company to issue certain capital stock;
o limit the ability of the Company and its restricted
subsidiaries to issue and sell capital stock of its restricted
subsidiaries;
o limit the ability of the Company and its restricted
subsidiaries to issue guarantees of indebtedness;
o limit the ability of the Company and its restricted
subsidiaries to enter into transactions with affiliates;
o limit the ability of the Company and its restricted
subsidiaries to sell assets;
o limit the ability of the Company and its restricted
subsidiaries to engage in unpermitted lines of business;
o limit the ability of the Company and its restricted
subsidiaries to enter into sale or leaseback transactions;
o limit the ability of the Company and its restricted
subsidiaries to make payments for consent, waiver or amendment of
any of the provisions of the Indenture; and
o require the Company to use reasonable best efforts to obtain a rating
for the senior notes.
Dobson Operating Co., L.L.C. Credit Facilities
On January 18, 2000, the Company's subsidiary, Dobson
Operating Co., L.L.C. ("Dobson Operating Co.") obtained a new
$800.0 million credit facility under a credit agreement with Bank
of America, N.A., as Administrative Agent and a group of
participating lenders, the proceeds of which were used primarily
to:
o consolidate the indebtedness of the Company's subsidiaries
under a $100.0 million credit facility and under a $250.0 million
credit facility;
o repurchase $159.7 million outstanding principal amount of
the Company's 11-3/4 % senior notes due 2007; and
o pay the cash portion of the costs of certain of the
Company's pending acquisitions.
Subsequently, under the terms and conditions of its credit
facilities, Dobson Operating Co., through its existing lenders,
borrowed an additional $125.0 million through a Discretionary
Term Loan B. The proceeds from this borrowing were used to
finance the purchase of the Texas 9 RSA on May 1, 2000.
Dobson Operating Co.'s credit facilities now include a
$300.0 million revolving credit facility and $625.0 million of
term loan facilities consisting of a Term Loan A of $350.0
million, a Term Loan B of $150.0 million, both of which mature in
2007, and a Discretionary Term Loan B of $125.0 million that
matures in 2008. The credit facilities can be repaid at any time
without penalty. As of June 1, 2000, $831.6 million was
outstanding under these credit facilities.
The credit facilities are structured to provide guarantees
from certain of Dobson Operating Co.'s subsidiaries and the
Company. Advances bear interest at the option of Dobson
Operating Co. on a prime rate or Eurodollar formula. The
weighted average interest rate was 8.6% as of March 31, 2000.
Obligations under the credit facilities are secured by:
o a pledge of the membership interests in the borrower;
o stock and partnership interests of certain of the borrower's
subsidiaries; and
o liens on substantially all of the assets of the borrower and
the borrower's restricted subsidiaries including FCC licenses,
but only to the extent such licenses can be pledged under
applicable law.
The Term Loan A amortizes with quarterly principal payments
of $5.0 million commencing June 30, 2001, increasing over the
term of the loan to quarterly principal payments of $25.0
million. The Term Loan B amortizes with quarterly principal
payments of $375,000 from March 31, 2000 through December 31,
2006 and with quarterly principal payments of $34.9 million
during 2007. The Discretionary Term Loan B amortizes with equal
quarterly principal payments of $312,500 from June 30, 2000
through March 31, 2007 and with quarterly principal payments of
$29.1 million from June 30, 2007 through March 31, 2008. In
addition, under certain circumstances, the facilities require
prepayment from proceeds received from significant assets sales,
new borrowings and sales of equity, and a portion of excess cash
flow.
An Amendment, Waiver, and Consent to the Dobson Operating
Co. credit agreement was entered into as of June 19, 2000 among
Dobson Operating Co., as Borrower, Bank of America, N.A., as
Administrative Agent, Required Lenders and Guarantors, whereby
Dobson Operating Co. requested certain waivers, consents, and
amendments to its credit agreement and the required lenders
granted and agreed to such waivers, consents, and amendments.
Pursuant to the credit agreement and the Amendment, Waiver and
Consent to the credit agreement, the credit facilities impose a
number of covenants that, among other things, limit the ability
of Dobson Operating Co. and its subsidiaries to incur additional
indebtedness, create liens, make capital expenditures and pay
dividends. In addition, Dobson Operating Co. and its
subsidiaries are required to maintain certain financial ratios
with respect to the borrower and certain of its subsidiaries,
including these ratios pertaining to the Company's subsidiaries:
o a ratio of total indebtedness to operating cash flow of
initially not more than 7.75 to 1, decreasing over time to 5.00
to 1;
o a ratio of operating cash flow to debt service requirements
of initially not less than 1.15 to 1, increasing over time to
1.50 to 1;
o a ratio of operating cash flow to interest expense of
initially not less than 1.40 to 1, increasing over time to 2.25
to 1, but decreasing to 1.25 to 1 for the period from June 30,
2000 to December 30, 2000;
o beginning on June 30, 2002, a ratio of operating cash flow
minus capital expenditures to the sum of debt service
requirements and cash distributions of initially not less than
1.05 to 1, increasing over time to 1.15 to 1; and
o a limitation of capital expenditures for 2000 and 2001.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibits are filed as a part of this report:
Exhibit Method of
No. Description Filing
------- ----------- ----------
4 Indenture entered into June 22, 2000 by (1)
the Registrant and United States Trust
Company of New York, as Trustee
10.1 Registration Rights Agreement entered (1)
into as of June 22, 2000 between Dobson
Communications Corporation and Banc of
America Securities LLC
10.2 Amendment, Waiver and Consent to the (1)
Dobson Operating Co. credit agreement
entered into as of June 19, 2000 among
Dobson Operating Co., L.L.C., as
Borrower, Bank of America, N.A., as
Administrative Agent, Required Lenders
and Guarantors
99 Press release dated June 22, 2000 (1)
announcing the closing of the sale of the
Registrant's 10-7/8% senior notes due
2010
___________________________________
(1) Filed herewith electronically.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Date: July 6, 2000 Dobson Communications Corporation
(Registrant)
By: BRUCE R. KNOOIHUIZEN
Name: Bruce R. Knooihuizen
Title: Vice President and Chief
Financial Officer
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INDEX TO EXHIBITS
Exhibit
No. Description Method of Filing
------- ------------ ----------------
4 Indenture entered into June Filed herewith electronically
22, 2000 by the Registrant and
United States Trust Company of
New York, as Trustee
10.1 Registration Rights Agreement Filed herewith electronically
entered into as of June 22,
2000 between Dobson
Communications Corporation and
Banc of America Securities LLC
10.2 Amendment, Waiver and Consent Filed herewith electronically
to the Dobson Operating Co.
credit agreement entered into
as of June 19, 2000 among
Dobson Operating Co., L.L.C.,
as Borrower, Bank of America,
N.A., as Administrative Agent,
Required Lenders and
Guarantors
99 Press release dated June 22, Filed herewith electronically
2000 announcing the closing of
the sale of the Registrant's
10-7/8% senior notes due 2010
