FCC Record, Volume 1, No. 7, Pages 1267 to 1368, December 22, 1986 - January 2, 1987 Page: 1,275

Federal Communications Commission Record

tions to the subsidiary, to ensure the creditworthiness of the
notes." UIN finds the "no recourse" provision of the agreement
(para. 7, supra) to be "puzzling," asserting that 85% of Southwestern
Bell's revenues are derived from SBTC. Accordingly, it
concludes that Southwestern Bell has failed to demonstrate that
it can complete the purchase without recourse to funds necessary
to operate SBTC. We find LIN's concerns to be without
merit. We have reviewed the agreement and find, as Southwestern
Bell asserts, that the terms do not violate the separate
subsidiary requirements. Creditors will have no recourse to the
stock or assets of SBTC, and we have concluded herein that
Southwestern Bell has funds available (even after the payment
of dividends and equity infusions into SBTC) to cover the
annual debt payments. See paras. 10-11, supra. LIN's implication
that Southwestern Bell will ignore the "no recourse"
provisions simply because it depends on SBTC to provide a
significant part of its revenues is speculation, and does not rely
on a rational analysis of the financing of the transaction.

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