TELEPHONE & DATA SYSTEMS INC /DE/TDS
TELEPHONE & DATA SYSTEMS INC /DE/ Debt Disclosure
Note 13 Debt
Revolving Credit Agreements
At December 31, 2025, TDS and Array had unsecured revolving credit agreements available for general corporate purposes. In December 2025, TDS and Array amended the agreements to extend the maturity date to December 2030 and the maximum borrowing capacity for the Array agreement was reduced from $300.0 million to $100.0 million. Amounts under the agreements may be borrowed, repaid and reborrowed from time to time until maturity.
The following table summarizes the unsecured revolving credit agreements as of December 31, 2025:
| TDS | Array | ||||||||||
| (Dollars in thousands) | |||||||||||
| Maximum borrowing capacity | $ | 400,000 | $ | 100,000 | |||||||
| Letters of credit outstanding | $ | 592 | $ | 57 | |||||||
| Amount available for use | $ | 399,408 | $ | 99,943 | |||||||
Borrowings under the TDS and Array revolving credit agreements bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 1.50%. TDS and Array may select a borrowing period of either one, two, three or six months (or other period of twelve months or less if requested by TDS or Array and approved by the lenders). TDS’ and Array’s credit spread and commitment fees on their revolving credit agreements may be subject to increase if their current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised.
Unsecured Term Loan Agreements
In August 2025, TDS repaid the entire outstanding borrowings under all of its unsecured term loan credit agreements of $781.3 million. TDS incurred a termination penalty of $8.9 million as a result of the repayment of one of its agreements, which was recorded to Interest expense in the Consolidated Statement of Operations.
In August 2025, Array repaid the entire outstanding borrowings under its term loan agreements of $713.3 million.
In August 2025, Array borrowed $325.0 million under a term loan agreement with CoBank, ACB. The maturity date of the agreement is June 2030. Borrowings bear interest at a rate of SOFR plus 2.50%. Quarterly principal installment payments are $2.0 million from September 2026 to June 2029 and $4.0 million from September 2029 to maturity date.
Secured Term Loan Agreement
In August 2025, TDS repaid the entire outstanding borrowing under its secured term loan agreement of $300.0 million.
Export Credit Financing Agreements
At December 31, 2025, TDS had $150.0 million of principal outstanding under a term loan credit facility with Export Development Canada to finance (or refinance) imported equipment, including equipment purchased prior to entering the term loan credit facility agreement. Borrowings bear interest at a rate of SOFR plus 1.60% and are due and payable on the five-year anniversary of the first borrowing, which is in December 2027. See Note 22 — Subsequent Events for additional information.
In August 2025, Array repaid the entire outstanding borrowings under its term loan agreement with Export Development Canada of $150.0 million.
Receivables Securitization Agreement
Array, through its subsidiaries, had a receivables securitization agreement that permitted securitized borrowings using its equipment installment plan receivables. In May 2025, Array repaid the entire outstanding borrowings under the agreement of $2.0 million. In July 2025, Array terminated the receivables securitization agreement.
Debt Covenants and Other
The TDS and Array revolving credit agreements, the Array term loan agreement with CoBank and the TDS export credit financing agreement require TDS or Array, as applicable, to comply with certain affirmative and negative covenants, which include certain financial covenants that may restrict the borrowing capacity available. Following the sale of the Array wireless operations to T-Mobile, TDS and Array are required to maintain a Consolidated Leverage Ratio, as defined in the agreements, as of the end of any fiscal quarter from and including the quarter in which such sale occurs at a level not to exceed 3.50 to 1.00. TDS and Array are also required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. TDS and Array believe they were in compliance as of December 31, 2025 with all such financial covenants.
In connection with Array’s revolving credit agreement, TDS and Array entered into subordination agreements together with the administrative agents for the lenders under the agreement. Pursuant to the subordination agreement, (a) any consolidated funded indebtedness from Array to TDS will be unsecured and (b) any (i) consolidated funded indebtedness from Array to TDS (other than “refinancing indebtedness” as defined in the subordination agreements) in excess of $105.0 million and (ii) refinancing indebtedness in excess of $250.0 million will be subordinated and made junior in right of payment to the prior payment in full of obligations to the lenders under each agreement. As of December 31, 2025, Array had no outstanding consolidated funded indebtedness or refinancing indebtedness that was subordinated to each agreement pursuant to the subordination agreements.
Certain TDS and Array wholly-owned subsidiaries have jointly and severally unconditionally guaranteed the payment and performance of the obligations of TDS and Array under the revolving credit agreements and the TDS export credit agreement. Other subsidiaries that meet certain criteria will be required to provide a similar guaranty in the future.
Long-term debt as of December 31, 2025 and 2024, was as follows:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||
Issuance date | Maturity date | Call date (any time on or after) | Principal Amount | Less Unamortized discount and debt issuance costs | Total | Principal Amount | Less Unamortized discount and debt issuance costs | Total | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Array Unsecured Senior Notes | ||||||||||||||||||||||||||||||||||||||||||||
| 6.70% | Dec 2003 and June 2004 | Dec 2033 | Dec 2003 and June 2004 | $ | 55,059 | $ | 921 | $ | 54,138 | $ | 55,059 | $ | 1,006 | $ | 54,053 | |||||||||||||||||||||||||||||
| 6.25% | Aug 2020 | Sep 2069 | Sep 2025 | 105,822 | 3,624 | 102,198 | 105,822 | 3,632 | 102,190 | |||||||||||||||||||||||||||||||||||
| 5.50% | Dec 2020 | Mar 2070 | Mar 2026 | 98,498 | 3,296 | 95,202 | 98,498 | 3,312 | 95,186 | |||||||||||||||||||||||||||||||||||
| 5.50% | May 2021 | Jun 2070 | Jun 2026 | 104,550 | 3,215 | 101,335 | 104,550 | 3,232 | 101,318 | |||||||||||||||||||||||||||||||||||
| Array Unsecured Term Loans | 325,000 | 3,552 | 321,448 | 723,250 | 3,774 | 719,476 | ||||||||||||||||||||||||||||||||||||||
| TDS Unsecured Term Loans | — | — | — | 785,250 | 16,010 | 769,240 | ||||||||||||||||||||||||||||||||||||||
| TDS Secured Term Loan | — | — | — | 300,000 | 2,034 | 297,966 | ||||||||||||||||||||||||||||||||||||||
| Array EIP Securitization | — | — | — | 2,000 | — | 2,000 | ||||||||||||||||||||||||||||||||||||||
| TDS Export Credit Financing | 150,000 | 321 | 149,679 | 150,000 | 377 | 149,623 | ||||||||||||||||||||||||||||||||||||||
| Array Export Credit Financing | — | — | — | 150,000 | 498 | 149,502 | ||||||||||||||||||||||||||||||||||||||
| Finance lease obligations | 3,074 | — | 3,074 | 3,246 | — | 3,246 | ||||||||||||||||||||||||||||||||||||||
| Other long-term notes | 1,564 | — | 1,564 | 3,017 | — | 3,017 | ||||||||||||||||||||||||||||||||||||||
| Total long-term debt | $ | 843,567 | $ | 14,929 | $ | 828,638 | $ | 2,480,692 | $ | 33,875 | $ | 2,446,817 | ||||||||||||||||||||||||||||||||
| Long-term debt, current | $ | 5,274 | $ | 31,131 | ||||||||||||||||||||||||||||||||||||||||
| Long-term debt, noncurrent | $ | 823,364 | $ | 2,415,686 | ||||||||||||||||||||||||||||||||||||||||
Array may redeem its 6.25% Senior Notes, 5.5% March 2070 Senior Notes and 5.5% June 2070 Senior Notes, in whole or in part at any time after the respective call date, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. Array may redeem the 6.7% Senior Notes, in whole or in part, at any time prior to maturity at a redemption price equal to the greater of (a) 100% of the principal amount of such notes, plus accrued and unpaid interest, or (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 30 basis points.
Interest on the Senior Notes outstanding at December 31, 2025, is payable quarterly, with the exception of Array's 6.7% Senior Notes for which interest is payable semi-annually.
The annual requirements for principal payments on long-term debt are approximately $5.3 million, $158.8 million, $8.3 million, $12.4 million and $292.8 million for the years 2026 through 2030, respectively. See Note 22 — Subsequent Events for additional information.
The covenants associated with TDS and its subsidiaries’ long-term debt obligations, among other things, restrict TDS’ ability, subject to certain exclusions, to incur additional liens and enter into certain transactions.
Array’s long-term debt notes do not contain any provisions resulting in acceleration of the maturities of outstanding debt in the event of a change in Array’s credit rating.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2015 | Feb 24, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.