Advance Auto Parts 2012 Annual Report Download - page 65

F-20
The interest rate on borrowings under the Facility is based, at the Company’s option, on an adjusted LIBOR rate, plus a
margin, or an alternate base rate, plus a margin. The current margin is 1.5% per annum for each of the adjusted LIBOR and
alternate base rate borrowings. A facility fee is charged on the total amount of the Facility, payable in arrears. The current
facility fee rate is 0.25% per annum. Under the terms of the Facility, the interest rate and facility fee are based on the
Company’s credit rating.
The Facility contains covenants restricting the Company's ability to, among other things: (1) permit the subsidiaries of
Advance Stores to create, incur or assume additional debt; (2) incur liens or engage in sale-leaseback transactions; (3) make
loans and investments (including acquisitions); (4) guarantee obligations; (5) engage in certain mergers and liquidations; (6)
change the nature of the Company’s business and the business conducted by its subsidiaries; (7) enter into certain hedging
transactions; and (8) change Advance’s status as a holding company. The Company is also required to comply with financial
covenants with respect to a maximum leverage ratio and a minimum consolidated coverage ratio. The Company was in
compliance with its covenants at December 29, 2012 and December 31, 2011, respectively. The Facility also provides for
customary events of default, covenant defaults and cross-defaults to the Company's other material indebtedness.
Senior Unsecured Notes
The Company’s 5.75% senior unsecured notes were issued in April 2010 at 99.587% of the principal amount of $300,000
and are due May 1, 2020 (the "2020 Notes"). The 2020 Notes bear interest at a rate of 5.75% per year payable semi-annually in
arrears on May 1 and November 1 of each year. The Company’s 4.50% senior unsecured notes were issued in January 2012 at
99.968% of the principal amount of $300,000 and are due January 15, 2022 (the "2022 Notes" or collectively with 2020 Notes,
"the Notes"). The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and
July 15 of each year. Advance served as the issuer of the Notes with certain of Advance’s domestic subsidiaries currently
serving as subsidiary guarantors. The terms of the Notes are governed by an indenture and supplemental indentures
(collectively the “Indenture”) among the Company, the subsidiary guarantors and Wells Fargo Bank, National Association, as
Trustee.
The Company may redeem some or all of the Notes at any time or from time to time, at the redemption price described in
the Indenture. In addition, in the event of a Change of Control Triggering Event (as defined in each of the Indentures for the
Notes), the Company will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest to the repurchase date. The Notes are currently fully and unconditionally guaranteed, jointly
and severally, on an unsubordinated and unsecured basis by each of the subsidiary guarantors. The Company will be permitted
to release guarantees without the consent of holders of the Notes under the circumstances described in the Indenture: (i) upon
the release of the guarantee of the Company's other debt that resulted in the affected subsidiary becoming a guarantor of this
debt; (ii) upon the sale or other disposition of all or substantially all of the stock or assets of the subsidiary guarantor; or (iii)
upon the Company's exercise of its legal or covenant defeasance option.
The Indenture contains customary provisions for events of default including for: (i) failure to pay principal or interest when
due and payable; (ii) failure to comply with covenants or agreements in the Indenture or the Notes and failure to cure or obtain
a waiver of such default upon notice; (iii) a default under any debt for money borrowed by the Company or any of its
subsidiaries that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace
period after final stated maturity, in an aggregate amount greater than $25,000 without such debt having been discharged or
acceleration having been rescinded or annulled within 10 days after receipt by the Company of notice of the default by the
Trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding; and (iv) events of
bankruptcy, insolvency or reorganization affecting the Company and certain of its subsidiaries. In the case of an event of
default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated. The Indenture also contains
covenants limiting the ability of the Company and its subsidiaries to incur debt secured by liens and to enter into sale and lease-
back transactions.
ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 29, 2012, December 31, 2011 and January 1, 2011
(in thousands, except per share data)