Computer Associates 2009 Annual Report Download - page 94

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depending on the Company’s credit rating at the time of the borrowing, the utilization fee can range from 0.10% to
0.25% for borrowings over 50% of the total commitment. At the Company’s credit ratings as of March 31, 2009, the
applicable margin was 0% for a base rate borrowing and 0.425% for a Eurocurrency borrowing, and the utilization fee
was 0.1%. As of March 31, 2009, the weighted average interest rate on the Company’s outstanding borrowings was
1.95%. In addition, the Company must pay facility commitment fees quarterly at rates dependent on its credit ratings.
The facility commitment fees can range from 0.08% to 0.375% of the final allocated amount of each Lender’s full
revolving credit commitment (without taking into account any outstanding borrowings under such commitments). Based
on the Company’s credit ratings as of March 31, 2009, the facility commitment fee was 0.125% of the $1 billion
committed amount.
The 2008 Revolving Credit Facility contains customary covenants for transactions of this type, including two financial
covenants: (i) for the 12 months ending each quarter-end, the ratio of consolidated debt for borrowed money to
consolidated cash flow, each as defined in the 2008 Revolving Credit Facility, must not exceed 4.00 to 1.00; and (ii) for
the 12 months ending each quarter-end, the ratio of consolidated cash flow to the sum of interest payable on, and
amortization of debt discount in respect of, all consolidated debt for borrowed money, as defined in the 2008 Revolving
Credit Facility, must not be less than 5.00 to 1.00. In addition, as a condition precedent to each borrowing made under
the 2008 Revolving Credit Facility, as of the date of such borrowing, (i) no event of default shall have occurred and be
continuing and (ii) the Company is to reaffirm that the representations and warranties made by the Company in the
2008 Revolving Credit Facility (other than the representation with respect to material adverse changes, but including the
representation regarding the absence of certain material litigation) are correct. As of March 31, 2009, the Company is in
compliance with these debt covenants.
Senior Note Obligations
As of March 31, 2009 and 2008, the Company had the following unsecured, fixed-rate interest, senior note obligations
outstanding:
(IN MILLIONS) 2009 2008
YEAR ENDED MARCH 31,
6.500% Senior Notes due April 2008 $— $ 350
1.625% Convertible Senior Notes due December 2009 460 460
4.750% Senior Notes due December 2009 176 500
6.125% Senior Notes due December 2014 500 500
6.500% Senior Notes
In the fiscal year ended March 31, 1999, the Company issued $1.75 billion of unsecured 6.500% Senior Notes in a
transaction pursuant to Rule 144A under the Securities Act of 1933 (Rule 144A). In the first quarter of fiscal year 2009,
the Company paid the $350 million of the 6.500% Senior Notes that was due and payable at that time. Subsequent to
this scheduled payment, there were no further amounts due under this issuance.
1.625% Convertible Senior Notes
In fiscal year 2003, the Company issued $460 million of unsecured 1.625% Convertible Senior Notes (1.625% Notes)
due December 2009, in a transaction pursuant to Rule 144A. The 1.625% Notes are senior unsecured indebtedness and
rank equally with all existing senior unsecured indebtedness. Concurrent with the issuance of the 1.625% Notes, the
Company entered into call spread repurchase option transactions (1.625% Notes Call Spread) to partially mitigate
potential dilution from conversion of the 1.625% Notes. The option purchase price of the 1.625% Notes Call Spread was
approximately $73 million and the entire purchase price was charged to stockholders’ equity in December 2002. Under
the terms of the 1.625% Notes Call Spread, the Company can elect to receive (i) outstanding shares equivalent to the
number of shares that will be issued if all of the 1.625% Notes are converted into shares (23 million shares) upon
payment of an exercise price of $20.04 per share (aggregate price of $460 million); or (ii) a net cash settlement, net
share settlement or a combination, whereby the Company will receive cash or shares equal to the increase in the market
value of the 23 million shares from the aggregate value at the $20.04 exercise price (aggregate price of $460 million),
subject to the upper limit of $30.00 discussed below. The 1.625% Notes Call Spread is designed to partially mitigate the
potential dilution from conversion of the 1.625% Notes, depending upon the market price of the Company’s common
stock at such time. The 1.625% Notes Call Spread can be exercised in December 2009 at an exercise price of $20.04
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