20151229Application.pdf

GtvENS PunsLEY,,"
Attorneys and Counselors at Law
601 W. Bonnock Streel
PO Box2720
Boise, lD 83/01
Telephone: 208-388-l 200
Focsimile: 208-388-i 300
ww.givenspu6ley.com
Michoel C. Creomer
2o,a-388-1247
[e-mail]
December 28,2015
HAND DELIVERY
Ms. Jean Jewell, Secretary
Idaho Public Utilities Commission
472 W . Washington Street
Boise, ID 83702
Re: Columbine Telephone Company Application COL-T-15-02. ATTENTION
COMMISSION SECRETARY AND HEAD LEGAL SECRETARY:
Columbine Telephone Company requests that the Commission issue an Order
approving the issuance of these securities on or before January 30,2016.
Dear Ms. Jewell:
I am enclosing an original and four (4) copies of Columbine Telephone Company's
application for loan approval together with a filing fee in the amount of $ I ,000. Please
acknowledge receipt by returning a conformed copy of the application in the enclosed SASE.
Also enclosed is a disk containing a Word version of the Proposed Order, the Horizon and
Columbine commitment letters and PDF of the signed resolution.
Sincerely,
MCC/lah
ts34-62 15058967-t
Enclosures
Potrick J. Miller
Judson B. Monlgomery
Deboroh E. Nelson
W. Hugh O'Riordon, LL.M.
Michoel O. Roe
P. Mork Thompson
Jeffrey A. Wor
Robert B. Whiie
Angelo M. Reed, of counsel
Kenneth L. Pursley (r940-20r5)
Jomes A. Mcclure (1924-201r)
Roymond D. Givens (r9rz-2008)
Gory G. Allen
Pe'ier G. Borlon
Chrislopher J. Beeson
Clinl R. Bolinder
Erik J. Bolinder
Jeff W. Bower
Preslon N. Corier
Jeremy C. Chou
Williom C. Cole
Michoel C. Creomer
Amber N. Dino
Brodley.l. Dixon
Thomos E. Dvorok
Jeffrey C. Feredoy
Mortin C. Hendrickson
Brion J. Holleron
Ke6ti H. Kennedy
Don E. Knickrehm
Neol A. Koskello
Deboro K. Kristensen
Michoel P. Lowrence
Fronklin G. Lee
Dovid R. Lombordi
Kimberly D. Moloney
Kenneth R. McClure
Kelly Greene Mcconnell
Alex P. McLoughlin
Melodie A. McOuode
Christopher H. Meyer
L. Edword Miller
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cc: Michelle Motzkus
Michael C. Creamer (ISB # 4030) ii :: I i:i i r,' ,1 :,'
Melodie A. McQuade (ISB # 9433)
GIVENS PURSLEY LLP lilli B[[ 28 fl]l lr: 30
277 North 6th Street, Suite 200 lilr.il-iU Fr_,r_,..i..P.O.Box2720 U; ttttji=S-CCl,i:r;SSt0i.lBoise,ID 83701
[phone]
[phone] (fax)
Attorneys for Columbine Telephone Company, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) Case No. COL-T-15-02
OF COLUMBINE TELEPHONE COMPANY, )
INC. FOR AUTHORTTY TO BORROW ) APPLTCATTON OF COLUMBTNE
FROM THE RURAL TELEPHONE FINANCE ) TELEPHONE COMPANY
CoOPERATTVE rN AN AMOUNT NOT TO )
EXCEED $3,333,334 AND TO GUARANTY )
LOAN rN AN AMOUNT NOT TO EXCEED )$8,333,333 )
Columbine Telephone Company, Inc. ("Columbine" or "Applicant"), by and through its
attorneys Givens Pursley LLP, makes this Application pursuant to Idaho Code $ 61-901 and
IDAPA 31.01.01 .l4l-141 for authority to: 1) execute a loan agreement with the Rural
Telephone Finance Cooperative ("RTFC") in an amount not to exceed $1,333,334 (the "A
Loan"); 2) execute a line of credit agreement with RTFC in an amount not to exceed $2,000,000
(the "B Loan") and execute an unsecured guaranty of payment (the "Guaranty'') in favor of
RTFC guaranteeing payment of a term loan to Columbine's parent company Horizon
Communications, Inc. ("Horizon") in the amount of $8,333,333 consisting of two separate debt
facilities, one in the amount of $4,444,444 and one in the amount of $3,888,889 (collectively the
"Horizon Loans"). In support of its Application, Columbine states as follows:
1. Applicant is a certificated telephone corporation organized under the laws of the
State of Wyoming providing telecommunication services, including local exchange service,
within the state of Idaho.
2. Columbine, along with its sister companies, Silver Star Telephone Company, Inc.,
a Wyoming corporation, Gold Star Communications, LLC, aWyoming limited liability company
APPLICATION OF COLUMBINE TELEPHONE COMPAI\Y, INC. - 1
("Gold Star"), Mountain Land Communications, LLC, aWyoming limited liability company and
Millennium Networks, LLC (collectively the "Horizon Subsidiaries"), is a wholly-owned
subsidiary of Horizon.
3. The proposed RTFC financing to Columbine consists of two components. The
A Loan is an eight-year secured loan in the amount of $1,333,334, of which $1,200,000 will
finance buildout of Columbine's ILEC infrastructure, including a redundant fiber ring, in
Rexburg, ID, and $133,334 will fund the purchase of ten percent RTFC Subordinated Capital
Certificates.
The B Loan is a two-year unsecured revolving line of credit in the amount of $2,000,000
which will be used for general corporate pu{poses. The material terms of the A Loan and the B
Loan are set forth in the Revised Conditional Loan Commitment Letter from RTFC to
Columbine dated December 23,2015.
4. The Guaranty is a condition of the Horizon Loans. The Horizon term loan will
be used to refinance the total outstanding balances on Horizon's subsidiaries' lines of credit from
RTFC and to finance Horizon's budgeted capital expenditures. The material terms of the Horizon
Loans are set forth in the Revised Conditional Loan Commitment Letter from RTFC to Horizon
dated December 23, 2015.
5. Columbine and its sister company Silver Star Telephone Company, Inc. each
would be required to provide unsecured guarantees for the Horizon Loans. Columbine's other
sister companies, Gold Star Communications, LLC and Millennium Networks, LLC will be
required to provide secured guarantees for the Horizon Loans. The Horizon Loans would be
furthered secured by first priority liens on Horizon assets.
6. Further details of the loans to Columbine and Horizon and Columbine's proposed
Guaranty pertinent to this Application are contained the above-referenced Revised Conditional
Loan Commitment Letters each dated December 23,2075, copies of which are being submitted
on a CD contemporaneously with this Application as confidential information for Commission
and Commission Staff review. Because RTFC has not yet finalized and presented the forms of
loan agreements, promissory notes, mortgages and guaranty ("Loan Documents") to Columbine,
Columbine will supplement the information included with this Application with copies of the
Loan Documents as soon as they are obtained from RTFC.
APPLICATION OF COLUMBINE TELEPHONE COMPANY,INC. - 2
7. Columbine submits that the proposed transaction is consistent with the public
interest. Loans to Columbine will be used to upgrade local exchange service facilities to, among
other things, improve quality and reliability of service. The unsecured obligation to guaranty
repayment of the Loans to Horizon will not further encumber Company assets or affect the
revenue requirement of its regulated operations.
8. A copy of the Applicant's most recent Annual Report showing the authorized and
outstanding classes of Applicant's securities is on file with the Commission, and the Applicant
respectfully requests the Commission take official notice thereof.
9. A certified copy of Columbine's Board of Directors' resolution authorizing the
proposed transactions and this Application to the Commission is attached hereto as Exhibit A.
10. A Proposed Order granting this Application is attached hereto as Exhibit B.
11. Notice of this Application will be published within seven (7) days of the date of
this Application in The Idaho Statesman (Boise). A copy of this Notice is attached as Exhibit C.
12. Applicant submits that the public interest does not require a hearing on this
matter, and it requests that the Commission process this Application and determine this matter by
Modified Procedure, pursuant to Rule 23 of the Commission's Rules of Practice and Procedure.
In the event the Commission determines that formal proceedings on this Application are
necessary, Applicant stands ready for immediate hearing.
13. Applicant has enclosed its filing fee, calculated pursuant to Section 61-905, Idaho
Code, in the amount of $1,000.
14. All notices and communications with regard to this Application should be served
upon:
Michael C. Creamer
Givens Pursley LLP
601 W. Bannock Street
P. O.Box2720
Boise,ID 83701
Michelle Motzkus, Secretary
Columbine Telephone Company, Inc.
P.O. Box226
Freedom, Wyoming 83120
(307) 883-667r
APPLICATION OF COLUMBINE TELEPHONE COMPANY,INC. -3
WHEREFORE, Applicant respectfully requests an Order of this Commission:
1. Granting the foregoing Application of Columbine Telephone Company, Inc. to
borrow as requested herein and to execute and deliver the Guaranty to RTFC; and
2. Granting such other relief as the Commission deems just and reasonable in this
matter. Jl
DATED tni" ZeGf December,2Ol5.
GIVENS PURSLEY LLP
Attorneys for Applicant Columbine Telephone
Company,Inc.
Michael C. Creamer
APPLTCATION OF COLIIMBINE TELEPHONE COMPANY, rNC. - 4
CERTIFICATE OF SERVICE
cr(
I HEREBY CERTIFY that on tneffi of December,2015I caused an original and
copies of the foregoing to be served upon:
Ms. Jean Jewell, Secretary
Idaho Public Utilities Commission
472W. Washington Street
Boise,ID 83702
byhand delivering the same to the above-named at the lastknown address(s) as set forth above.
APPLICATTON OF COLT MBINE TELEPSONE COMPANY, rNC. - 5
EXHIBIT A
l
CERTIFIED COPY OF'MINUTES AUTHORIZING OBTAINING RTFC TERM LOAN
rN TIrE AMOIINT OF $1,333334, REVOLyING LINE OF CREDIT
IN TrrE AMOUNT Otr'$2,000,000 AND PROVDING UNSECURED GUARANTY
TO HORIZON COMMUI\ICATIONS, INC.
I, Michelle Motzkus, do hereby certiff that: I am the Secretary of Columbine Telephone
Company, Inc (the "Company").
The following is a tnre and correct copy of excerpts from the minutes of a meeting of the
Board of Directors of the Company held December 23,2015, as they appear in the Minutes Book
of the Company, said resolutions duly adopted thereat; the meeting was duly and regularly called
in accordance with the bylaws of the Company; the A Loan, B Loan to Columbine and Guaranty
to be required of the Company by Rural Telephone Finance Cooperative ("RTFC") was
authorized by the Board of Directors as set forth below and said resolutions have not been
modified or rescinded:
WHEREAS, the directors of the Company have been presented with a
revised conditional loan agteement ("Columbine Loan Commitment"), a copy of
which is attached to this Resolution, by which the Company would obtain a loan
from Rural Telephone Finance Cooperative (*RTFC") in the amount of One
Million Three Hundred Thirty-Three Thousand Three Hundred Thirty-Four
Dollars ($1,333,334) (the "A Loan") to finance the buildout of the Company's
incumbent local exchange carrier infrastructure, including a redundant fiber ring
in Rexburg, Idaho and the purchase of ten percent RTFC Subordinated Capital
Certificates, together with a Two Million Dollar (S2,000,000) short-term
operating line of credit (the "B Loan") as more particularly described in the
Columbine Loan Commifrnent; and
WHEREAS, the directors of the Company have been presented with a
form of revised conditional loan commitment ("Horizon Loan Commitment")
from RTFC to the Company's parent company, Horizon Communications, Inc.
("Horizon"), a copy of which is attached to this Resolution, by which RTFC
would extend a loan to Horizon in the amount Four Million Four Hundred Forty-
Four Thousand Four Hundred Forty-Four Dollars (94,444,444) to refinance the
total outstanding balances on Horizon's subsidiaries' lines of credit from RTFC
and the purchase of ten percent RTFC Subordinated Capital Certificates, together
with a loan in the amount of Three Million Eight Hundred Eighty-Eight Thousand
Eight Hun&ed Eighty Nine Dollars ($3,888,889) to finance Horizon's budgeted
capital expenditures (the "Horizon Loans") as more particularly described in the
Horizon Loan Commitrnent; and
WHEREAS, ffi I condition of the Horizon Loans, the Company, along
with the Company's sister entities is required to provide an unsecured guaranty
("Horizon Guaranty"); and
WHEREAS, the directors believe the A Loan and B Loan to the Company,
and the Company's guaranty of the Horizon Loans on substantially the terms and
conditions dcscribed in the revised conditional loan commitments to be in the best
interests of the Company.
RESOLVED thatthe Company proceed to finalize the A Loan and the B
Loan and the Horizon Guaranty with RTFC on substantially the terms set forth in
the Columbine Loan Commitnent and the Horizon Loan Commitment subject to:
l. Approval of final loan documents and the guaranty by the directors
of the Company;
2. Approval of the A Loan, the B Loan and the Horizon Guaranty by
the ldaho Public Utilities Commission.
RESOLVED, that the Company shall make application to the Idaho Public
Utilities Commission for approval of the A Loan, the B Loan and the Horizon
Cuaranty; and
RESOLVED, ttrat all actions heretofore taken by the authorized agents of
the Company in connection with and in furtherance of the A Loan, the B Loan
and the Guaranty are hereby ratified and confirmed in all respects as acts of the
Company.
IN WIQ$ESS, WHEREOF, I have hereunder set my hand and affixed the seal of the
Company. thiJ fFthv of December, 201 5.,,Ltr ',\
EXHIBIT B
Michael C. Creamer (lSB # 4030)
Melodie A. McQuade (lSB # 9433)
GIVENS PURSLEY LLP
277 North 6th Street, Suite 200
P.O.Box2720
Boise,ID 83701
[phone]
[phone] (fax)
Attorneys for Columbine Telephone Company, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) Case No. COL-T-15-02
OF COLUMBINE TELEPHONE )
coMpANy, INC. FOR AUTHORITY TO ) PROPOSED ORDER
BORROW FROM THE RURAL )
TELEPHONE FINANCE COOPERATIVE )
IN AN AMOUNT NOT TO EXCEED )
$3,333,334 AND TO GUARANTY LOAN )
rN AN AMOUNT NOT TO EXCEED )$8,333,333 )
On December 28,2015, Columbine Telephone Company, Inc. (hereinafter Applicant),
filed an Application for authority to: l) execute a Loan Agreement in an amount not to exceed
$1,333,334 (the "A Loan"); 2) aline of credit agreement in an amount not to exceed $2,000,000
(the "B Loan") and an unsecured guaranty of payment (the "Guaranty'') in favor of the Rural
Telephone Finance Cooperative ("RTFC") guaranteeing payrnent of a term loan from RTFC to
Columbine's parent company Horizon Communications, Inc. ("Horizon") in the amount of
$4,444,444 and a revolving line of credit in the amount of $3,888,889 (collectively the o'Horizon
Loans").
In support of said Application, Applicant alleges that the proceeds of the RTFC loans to
Columbine which $1,200,000 will finance buildout of Columbine's ILEC infrastructure,
including a redundant fiber ring, in Rexburg, ID, and $133,334 will fund the purchase of ten
percent RTFC Subordinated Capital Certif,rcates and the line of credit will be used for general
corporate purposes. Applicant further alleges that the Guaranty is a condition of the Horizon
COLUMBINE TELEPHONE COMPANY, INC.
cAsE No. col-T-r5-02
EXHIBITB
Loans proposed to be made by RTFC, and that guarantees by each of Columbine's sister
companies also would be required.
After examining the Application and supporting documents and being fully advised in the
premises, the Commission hereby finds that a hearing in this matter is not required, and that the
proposed transaction is consistent with the public interest.
IT IS THEREFORE ORDERED that the Application of Columbine Telephone Company,
Inc. for authority to execute borrow from RTFC in an amount not to exceed $3,333,334 and
provide an unsecured Guaranty for loans to Horizon in an amount not to exceed $8,333,333
substantially in the form of that submitted to the Commission and thereby guaranty payment of
the Horizon Loans be, and is hereby granted.
DONE by Order of the Idaho Public Utilities Commission this _ day of
201
PAUL zuELLANDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
KRISTINE RAPER, COMMISSIONER
ATTEST:
Jean D. Jewell
Commission Secretary
COLUMBINE TELEPHONE COMPAI\IY, INC.
CasB No. COL-T-15-02
EXHIBITB
EXHIBIT C
LEGAL NOTICE OF COLUMBINE TELEPHONE COMPANY
APPLICATION FOR AUTHORITY TO GUARANTY LOAN
CASE NO. COL-T-15-02
NOTICE IS HEREBY GIVEN that on December 28,2015, Columbine Telephone Company
filed with the Idaho Public Utilities Commission an Application for authority to borrow in an
amount not to exceed $3,333,334 and to guaranty a loan in the principal amount of $8,333,334 to
be made by the Rural Telephone Finance Cooperative to the Applicant's parent company
Horizon Communications, Inc.
The Application is on file with, and may be obtained from, the Commission, whose offices are
located at 427 W. Washington, Boise, Idaho 83702-5918 (208-334-0300), or may be viewed on
the Commission's homepage at: http://www.puc.idaho.eov/fileroorn/cases/summar.y/tele.html.
Any person desiring to comment on said Application must file petitions or protests with the
Idaho Public Utilities Commission within fourteen (14) days of the filing date. If no protests are
received within this time limit, the Commission may consider the Application and enter its Order
without setting the matter for hearing. If written protests are filed with the Commission within
the time limit set, the Commission will consider the same and, in its discretion, may set a
hearing. Petitions or protests must be filed with: Jean Jewell, Secretary, Idaho Public Utilities
Commission,4T2 W. Washington Street, Boise, Idaho 83702.
Jean Jewell, Secretary
Idaho Public Utilities Commission
COLUMBINE TELEPHONE COMPAI\Y, INC.
CASE NO. COL-T-15-02
ExrunmC