Long-Term Debt | 9 Months Ended |
Sep. 28, 2013 |
Long-Term Debt | ' |
5 | Long-Term Debt | | | | | | | | | | | | | | | |
The components of the Company’s long-term debt are as follows: |
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| | September 28, 2013 | | | December 29, 2012 | |
| | | | | Effective | | | | | | Effective | |
| | Balance | | | Rate | | | Balance | | | Rate | |
Revolving Facility due April 2, 2018 | | $ | 0 | | | | 0 | % | | $ | 0 | | | | 0 | % |
Tranche B-1 Term Facility due April 2, 2016 | | | 299,250 | | | | 2.99 | % | | | 0 | | | | 0 | % |
Tranche B-2 Term Facility due April 2, 2020 | | | 2,094,750 | | | | 3.75 | % | | | 0 | | | | 0 | % |
Revolver A-1 due June 30, 2014 | | | 0 | | | | 0 | % | | | 6,374 | | | | 3.12 | % |
Revolver A-2 due March 15, 2017 | | | 0 | | | | 0 | % | | | 23,626 | | | | 2.56 | % |
Term A-1 Loan due January 26, 2013 | | | 0 | | | | 0 | % | | | 38,226 | | | | 1.53 | % |
Term B Loan due January 26, 2014 | | | 0 | | | | 0 | % | | | 129,445 | | | | 1.9 | % |
Term C Loan due June 30, 2015 | | | 0 | | | | 0 | % | | | 113,808 | | | | 2.72 | % |
Term D Loan due June 30, 2016 | | | 0 | | | | 0 | % | | | 118,217 | | | | 2.77 | % |
Term E Loan due March 15, 2017 | | | 0 | | | | 0 | % | | | 1,154,651 | | | | 2.53 | % |
Term F Loan due March 15, 2019 | | | 0 | | | | 0 | % | | | 822,017 | | | | 3.92 | % |
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Total Debt | | | 2,394,000 | | | | 3.43 | % | | | 2,406,364 | | | | 2.91 | % |
Less Current Portion | | | 24,000 | | | | | | | | 114,695 | | | | | |
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Total Long-Term Debt | | $ | 2,370,000 | | | | | | | $ | 2,291,669 | | | | | |
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The Company’s credit facilities at the end of the first quarter of fiscal 2013 consisted of the following term loan facilities and revolving credit facilities: a tranche A-1 loan (“Term A-1 Loan”), a tranche B loan (“Term B Loan”), a tranche C loan (“Term C Loan”), a tranche D loan (“Term D Loan”), a tranche E loan (“Term E Loan”), a tranche F loan (“Term F Loan”), revolving credit facility A-1 (“Revolver A-1” ) and revolving credit facility A-2 (“Revolver A-2”). |
On April 2, 2013, the Company refinanced its credit facilities pursuant to a Credit Agreement (the “New Credit Agreement”) among the Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and an issuing bank, The Bank of Nova Scotia, as revolving agent, swingline lender and an issuing bank, and the other parties thereto. The New Credit Agreement provides for (a) a revolving credit facility (including swing line loans and letters of credit) in an initial aggregate principal amount of $250,000 that will mature on April 2, 2018 (the “Revolving Facility”), (b) an initial term B-1 loan credit facility in an aggregate principal amount of $300,000 that will mature on April 2, 2016 (the “Tranche B-1 Term Facility”) and (c) an initial term B-2 loan credit facility in an aggregate principal amount of $2,100,000 that will mature on April 2, 2020 (the “Tranche B-2 Term Facility”, and together with the Tranche B-1 Term Facility, the “Term Facilities”; the Term Facilities and Revolving Facility collectively, the “WWI Credit Facility”). In connection with this refinancing, the Company used the proceeds from borrowings under the Term Facilities to pay off a total of $2,399,904 of outstanding loans, consisting of $128,759 of Term B Loans, $110,602 of Term C Loans, $117,612 of Term D Loans, $1,125,044 of Term E Loans, $817,887 of Term F Loans, $21,247 of loans under the Revolver A-1 and $78,753 of loans under the Revolver A-2. Following the refinancing of a total of $2,399,904 of loans, at April 2, 2013, the Company had $2,400,000 debt outstanding under the Term Facilities and $248,848 of availability under the Revolving Facility. The Company incurred fees of approximately $45,000 during the second quarter of fiscal 2013 in connection with this refinancing. In the second quarter of fiscal 2013, the Company wrote-off fees associated with this refinancing which resulted in the Company recording a charge of $21,685 in early extinguishment of debt. |
At September 28, 2013, the Company had $2,394,000 outstanding under the WWI Credit Facility, consisting entirely of term loans and there were no loans outstanding under the Revolving Facility. In addition, at September 28, 2013, the Revolving Facility had $1,152 in issued but undrawn letters of credit outstanding thereunder and $248,848 in available unused commitments thereunder. The proceeds from borrowings under the Revolving Facility (including swing line loans and letters of credit) will be used for working capital and general corporate purposes. |
Borrowings under the New Credit Agreement bear interest at a rate equal to, at the Company’s option, LIBOR plus an applicable margin or a base rate plus an applicable margin. LIBOR under the Tranche B-2 Term Facility is subject to a minimum interest rate of 0.75% and the base rate under the Tranche B-2 Term Facility is subject to a minimum interest rate of 1.75%. The applicable margin relating to both of the Term Facilities will increase by 25 basis points in the event that the Company receives a corporate rating of BB- (or lower) from S&P and a corporate rating of Ba3 (or lower) from Moody’s. The applicable margin relating to the Revolving Facility will fluctuate depending upon the Company’s total leverage ratio. At September 28, 2013, borrowings under the Tranche B-1 Term Facility bore interest at LIBOR plus an applicable margin of 2.75% and borrowings under the Tranche B-2 Term Facility bore interest at LIBOR plus an applicable margin of 3.00%. At the Company’s total leverage ratio as of September 28, 2013, had there been any borrowings under the Revolving Facility, it would have borne interest at LIBOR plus an applicable margin of 2.25% or base rate plus an applicable margin of 1.25%. On a quarterly basis, the Company will pay a commitment fee to the lenders under the Revolving Facility in respect of unutilized commitments thereunder, which commitment fee will fluctuate depending upon the Company’s total leverage ratio. At the Company’s total leverage ratio as of September 28, 2013, the commitment fee was 0.40% per annum. The Company also will pay customary letter of credit fees and fronting fees under the Revolving Facility. |
The New Credit Agreement contains customary covenants including covenants that, in certain circumstances, restrict the Company’s ability to incur additional indebtedness, pay dividends on and redeem capital stock, make other payments, including investments, sell its assets and enter into consolidations, mergers and transfers of all or substantially all of its assets. The Revolving Facility also requires the Company to maintain the Consolidated Leverage Ratio (as defined in the New Credit Agreement), but only if borrowings under the Revolving Facility exceed 20.0% of revolving commitments. The Term Facilities do not require the Company to maintain any financial ratios. The WWI Credit Facility is guaranteed by certain of the Company’s existing and future subsidiaries. Substantially all of the Company’s assets secure the WWI Credit Facility. |
At September 28, 2013 and December 29, 2012, the Company’s debt consisted entirely of variable-rate instruments. Interest rate swaps were entered into to hedge a portion of the cash flow exposure associated with the Company’s variable-rate borrowings. The average interest rate on the Company’s debt, exclusive of the impact of swaps, was approximately 3.65% and 2.99% per annum at September 28, 2013 and December 29, 2012, respectively. |