Bed, Bath and Beyond 2014 Annual Report Download - page 30

6. LONG TERM DEBT
Senior Unsecured Notes
On July 17, 2014, the Company issued $300 million aggregate principal amount of 3.749% senior unsecured notes due
August 1, 2024 (the ‘‘2024 Notes’’), $300 million aggregate principal amount of 4.915% senior unsecured notes due August 1,
2034 (the ‘‘2034 Notes’’) and $900 million aggregate principal amount of 5.165% senior unsecured notes due August 1, 2044
(the ‘‘2044 Notes’’ and, together with the 2024 Notes and the 2034 Notes, the ‘‘Notes’’). The aggregate net proceeds from the
Notes were approximately $1.5 billion, which was used for share repurchases of the Company’s common stock and for general
corporate purposes. Interest on the Notes is payable semi-annually on February 1 and August 1 of each year, beginning on
February 1, 2015.
The Notes were issued under an indenture (the ‘‘Base Indenture’’), as supplemented by a first supplemental indenture
(together, with the Base Indenture, the ‘‘Indenture’’), which contains various restrictive covenants, which are subject to
important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants
related to the Notes as of February 28, 2015.
The Notes are unsecured, senior obligations and rank equal in right of payment to any of the Company’s existing and future
senior unsecured indebtedness. The Company may redeem the Notes at any time, in whole or in part, at the redemption prices
described in the Indenture plus accrued and unpaid interest to the redemption date. If a change in control triggering event, as
defined by the Indenture governing the Notes, occurs unless the Company has exercised its right to redeem the Notes, the
Company will be required to make an offer to the holders of the Notes to purchase the Notes at 101% of their principal
amount, plus accrued and unpaid interest.
Revolving Credit Agreement
On August 6, 2014, the Company entered into a $250 million five year senior unsecured revolving credit facility agreement
(‘‘Revolver’’) with various lenders. During the period from August 6, 2014 through February 28, 2015, the Company did not
have any borrowings under the Revolver.
Borrowings under the Revolver accrue interest at either (1) a fluctuating rate equal to the greater of the prime rate, as defined
in the Revolver, the Federal Funds Rate plus 0.50%, or one-month LIBOR plus 1.0% and, in each case, plus an applicable margin
based upon the Company’s leverage ratio which is calculated quarterly, (2) a periodic fixed rate equal to LIBOR plus an
applicable margin based upon the Company’s leverage ratio which is calculated quarterly or (3) an agreed upon fixed rate. In
addition, a commitment fee is assessed, which is included in interest expense, net in the Consolidated Statement of Earnings.
The Revolver contains customary affirmative and negative covenants and also requires the Company to maintain a minimum
leverage ratio. The Company was in compliance with all covenants related to the Revolver as of February 28, 2015.
Deferred financing costs associated with the Notes and the Revolver of approximately $10.1 million were capitalized and are
included in other assets in the accompanying Consolidated Balance Sheets. These deferred financing costs are being amortized
over the term of each of the Notes and the term of the Revolver and such amortization is included in interest expense, net in
the Consolidated Statement of Earnings. Interest expense related to the Notes and the Revolver, including the commitment
fee and the amortization of the deferred financing costs, was approximately $44.9 million for the period from July 17, 2014
through February 28, 2015.
Lines of Credit
At February 28, 2015, the Company maintained two uncommitted lines of credit of $100 million each, with expiration dates of
September 1, 2015 and February 28, 2016, respectively. These uncommitted lines of credit are currently and are expected to be
used for letters of credit in the ordinary course of business. During fiscal 2014 and 2013, the Company did not have any direct
borrowings under the uncommitted lines of credit. As of February 28, 2015, there was approximately $11.1 million of
outstanding letters of credit. Although no assurances can be provided, the Company intends to renew both uncommitted lines
of credit before the respective expiration dates. In addition, as of February 28, 2015, the Company maintained unsecured
standby letters of credit of $71.7 million, primarily for certain insurance programs. As of March 1, 2014, there was
approximately $4.5 million of outstanding letters of credit and approximately $74.3 million of outstanding unsecured standby
letters of credit, primarily for certain insurance programs.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
BED BATH & BEYOND 2014 ANNUAL REPORT
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