Burger King 2012 Annual Report Download - page 91

Table of Contents
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On the Closing Date, the full amount of the Tranche A Term Loans and Tranche B Term Loans was drawn and no revolving loans were drawn. The
proceeds of the Tranche A Term Loans and the Tranche B Term Loans were used to repay the term loans outstanding under the 2011 Amended Credit
Agreement. In addition, approximately $11.5 million of letters of credit were issued in order to backstop, replace or roll-over existing letters of credit under the
2011 Amended Credit Agreement.
The Tranche A Term Loans have a five-year maturity, and the Tranche B Term Loans have a seven-year maturity. The 2012 Revolving Credit Facility
matures on October 19, 2015, which was the maturity date of the revolving credit facility under the 2011 Amended Credit Agreement. The principal amount
of the Tranche A Term Loans amortizes in quarterly installments of (i) $6.4 million from December 31, 2012 through September 30, 2013, (ii) $12.9 million
from December 31, 2013 through September 30, 2014, (iii) $19.3 million from December 31, 2014 through September 30, 2015, (iv) $25.8 million from
December 31, 2015 through September 30, 2016, and (v) $32.2 million from December 31, 2016 through June 30, 2017, with the balance payable at
maturity. The principal amount of the Tranche B Term Loans amortizes in quarterly installments equal to 0.25% of the original principal amount of the
Tranche B Term Loans, with the balance payable at maturity.
As of December 31, 2012, we had $11.6 million in irrevocable standby letters of credit outstanding, which were issued under the 2012 Revolving
Credit Facility primarily to certain insurance carriers to guarantee payments of deductibles for various insurance programs, such as health and commercial
liability insurance. These letters of credit are secured by the collateral under the 2012 Credit Facilities. As of December 31, 2012, no amounts had been drawn
on any of these irrevocable standby letters of credit and our remaining borrowing capacity under the 2012 Revolving Credit Facility was $118.4 million as of
December 31, 2012.
Subject to certain exceptions, the 2012 Credit Facilities are subject to mandatory prepayments in amounts equal to (1) 100% of the net cash proceeds
from any non-ordinary course sale or other disposition of assets (including as a result of casualty or condemnation); (2) 100% of the net cash proceeds from
issuances or incurrences of debt by Holdings, BKC or any of its restricted subsidiaries (other than indebtedness permitted by the 2012 Credit Facilities); and
(3) 50% (with stepdowns to 25% and 0% based upon achievement of specified total leverage ratios) of annual excess cash flow of BKC and its restricted
subsidiaries.
At BKC’s election, the interest rate per annum applicable to the loans is based on a fluctuating rate of interest determined by reference to either (i) a base
rate determined by reference to the highest of (a) the prime rate of JPMorgan Chase Bank, N.A., (b) the federal funds effective rate plus 0.50% and (c) the
Eurocurrency rate applicable for an interest period of one month plus 1.00% (“Alternate Base Rate Loans”), plus an applicable margin equal to 1.25% for any
Tranche A Term Loan, 1.75% for any Tranche B Term Loan and 2.25% for loans under the 2012 Revolving Credit Facility, or (ii) a Eurocurrency rate
determined by reference to LIBOR, adjusted for statutory reserve requirements (“Eurocurrency Loans”), plus an applicable margin equal to 2.25% for any
Tranche A Term Loan, 2.75% for any Tranche B Term Loan and 3.25% for loans under the 2012 Revolving Credit Facility; provided that the foregoing
margins applicable to the Tranche A Term Loans are subject to reduction after financial statements have been delivered for the first full fiscal quarter after the
Closing Date based upon achievement of specified leverage ratios. Borrowings of Tranche B Term Loans will be subject to a floor of 1.00% in the case of
Eurocurrency Loans and 2.00% in the case of Alternate Base Rate Loans. We have elected our applicable rate per annum as Eurocurrency rate determined by
reference to LIBOR. As of December 31, 2012, the interest rate was 2.5625% on our outstanding Tranche A Term Loan and 3.75% on our outstanding
Tranche B Term Loan.
The 2012 Credit Facilities contain a number of customary affirmative and negative covenants that, among other things, will limit or restrict the ability
of BKC and its restricted subsidiaries to: incur additional indebtedness (including guarantee obligations); incur liens; engage in mergers, consolidations,
liquidations and
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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