Best Buy 2014 Annual Report Download - page 87

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(1) Amounts relate to our previous £400 million Europe unsecured revolving credit facility agreement (the "RCF"). Interest rates under the previous RCF
were variable, based on LIBOR plus an applicable margin based on Best Buy Europe's fixed charges coverage ratio. As described in Note 4, Discontinued
Operations, we sold our interest in Best Buy Europe on June 26, 2013.
U.S. Revolving Credit Facilities
On June 25, 2013, we entered into a $500 million 364-day senior unsecured revolving credit facility agreement (the "364-Day
Facility Agreement") with a syndicate of lenders. The 364-Day Facility Agreement replaces the previous $1.0 billion senior
unsecured revolving credit facility with a syndicate of banks, which was originally scheduled to expire on August 30, 2013, but
was terminated on June 25, 2013.
The interest rate under the 364-Day Facility Agreement is variable and is determined at the registrant's option as either: (i) the
sum of (a) the greatest of (1) JPMorgan's prime rate, (2) the federal funds rate plus 0.5%, and (3) the one-month London
Interbank Offered Rate (“LIBOR”) plus 1.0%, and (b) a variable margin rate (the “ABR Margin”); or (ii) the LIBOR plus a
variable margin rate (the “LIBOR Margin”). In addition, a facility fee is assessed on the commitment amount. The ABR
Margin, LIBOR Margin and the facility fee are based upon our current senior unsecured debt rating by Standard and Poor's
Rating Services and Moody's Investors Services, Inc. Under the 364-Day Facility Agreement, the ABR Margin ranges from
0.0% to 0.6%, the LIBOR Margin ranges from 0.925% to 1.6%, and the facility fee ranges from 0.075% to 0.275%. The 364-
Day Facility Agreement terminates in June 2014 (subject to a one-year term-out option).
On October 7, 2011, we entered into a $1.5 billion five-year unsecured revolving credit facility agreement (the "Five-Year
Facility Agreement and, collectively with the 364-Day Facility Agreement, the "Agreements") with a syndicate of banks. The
interest rates under the Five-Year Facility Agreement is variable and determined at our option as: (i) the sum of (a) the greatest
of JPMorgan's prime rate, the federal funds rate plus 0.5%, or the one-month London Interbank Offered Rate (“LIBOR”) plus
1.0%, and (b) a margin (the “ABR Margin”); or (ii) the LIBOR plus a margin (the “LIBOR Margin”). In addition, a facility fee
is assessed on the commitment amount. The ABR Margin, LIBOR Margin and the facility fee are based upon our long-term
credit ratings. Under the Five-Year Facility Agreement, the ABR Margin ranges from 0.0% to 0.475%, the LIBOR Margin
ranges from 0.875% to 1.475%, and the facility fee ranges from 0.125% to 0.275%. The Five-Year Facility Agreement
terminates in October 2016.
The Agreements permit borrowings of up to $2.0 billion (which may be increased to up to $2.5 billion at our option under
certain circumstances) and a $300 million letter of credit sublimit. At February 1, 2014, and February 2, 2013, there were no
borrowings outstanding and at February 1, 2014, $2.0 billion was available under the Agreements.
The Agreements are guaranteed by specified subsidiaries of Best Buy Co., Inc. and contain customary affirmative and negative
covenants. Among other things, these covenants restrict Best Buy Co., Inc. or its subsidiaries' ability to incur certain types or
amounts of indebtedness, incur liens on certain assets, make material changes in corporate structure or the nature of its
business, dispose of material assets, engage in a change in control transaction, make certain foreign investments, enter into
certain restrictive agreements or engage in certain transactions with affiliates. The Agreements also contain covenants that
require us to maintain a maximum quarterly cash flow leverage ratio and a minimum quarterly interest coverage ratio. The
Agreements contain customary default provisions including, but not limited to, failure to pay interest or principal when due and
failure to comply with covenants.
Canada Revolving Demand Facility
We have $4 million in a revolving demand facility available to our Canada operations. There were no borrowings outstanding
under the facility at February 1, 2014, or February 2, 2013. There is no set expiration date for the facility. All borrowings under
the facility are made available at the sole discretion of the lender and are payable on demand. Borrowings under the facility
bear interest at rates specified in the credit agreement for the facility. Borrowings are secured by a guarantee of Best Buy Co.,
Inc.
China Revolving Demand Facilities
We have $158 million in revolving demand facilities available to our China operations, of which no borrowings were
outstanding at February 1, 2014, or February 2, 2013. The facilities are renewed annually with the respective banks. All
borrowings under these facilities bear interest at rates specified in the related credit agreements, are made available at the sole
discretion of the respective lenders and are payable on demand. Certain of these facilities are secured by a guarantee of
Best Buy Co., Inc.