Computer Associates 2011 Annual Report Download - page 83

Revolving credit facility: The maximum committed amount available under the Revolving Credit Facility due August 2012 is
$1 billion, exclusive of incremental credit increases of up to an additional $500 million, which are available subject to certain
conditions and the agreement of its lenders.
Borrowings under the Revolving Credit Facility bear interest at a rate dependent on the Company’s credit ratings at the time
of such borrowings and are calculated according to a base rate or a Eurocurrency rate, as the case may be, plus an applicable
margin. In addition, depending on the Company’s credit rating at the time of the borrowing, the Company must pay a
utilization fee for borrowings over 50% of the total commitment. The Company must also pay facility commitment fees
quarterly on the final allocated amount of each Lender’s full revolving credit commitment (without taking into account any
outstanding borrowings under such commitments) and at rates dependent on its credit ratings.
For incremental borrowings that are not subject to a utilization fee, the applicable interest rate at March 31, 2011, based on
the Company’s credit rating, is approximately 0.66% (Eurocurrency rate plus the applicable margin).
Total interest expense relating to borrowings under the Revolving Credit Facility for fiscal years 2011, 2010 and 2009 was
approximately $2 million, $5 million and $24 million, respectively. Interest rates applicable to the facility at March 31, 2011
and 2010 are as follows:
2011 2010
AT MARCH 31,
Weighted average interest rate on outstanding borrowings 0.65% 3.18%
Applicable margin on Eurocurrency borrowing 0.35% 0.35%
Utilization fee 0.10% 0.10%
Facility commitment fee 0.10% 0.10%
The Revolving Credit Facility contains financial and non-financial covenants and negative covenants. The financial covenants
include: (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 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 Revolving Credit Facility, must not be less than 5.00
to 1.00. At March 31, 2011, the Company is in compliance with all covenants. In addition, as a condition precedent to each
borrowing made under the Revolving Credit Facility, at the date of such borrowing, (i) no event of default shall have occurred
and be continuing and (ii) the Company is to reaffirm the representations and warranties made by the Company in the
Revolving Credit Facility other than those representations and warranties that referred to a specified date or period.
The Company repaid the outstanding Revolving Credit Facility balance of $250 million in April 2011.
Notes: The Company’s 5.375% Notes and 6.125% Senior Notes (collectively, the “Notes”) are senior unsecured obligations and
rank equally in right of payment with all of the Company’s other existing and future senior unsecured indebtedness. The Notes
are subordinated to any future secured indebtedness to the extent of the assets securing such future indebtedness and
structurally subordinated to any indebtedness of the Company’s subsidiaries. The Company has the option to redeem the
Notes at any time, at redemption prices equal to the greater of (i) the principal amount of the securities to be redeemed or
(ii) the sum of the present values of the remaining scheduled payments of principal thereof and interest thereon that would
be due on the securities to be redeemed, discounted to the date of redemption on a semi-annual basis at the treasury rate
plus 30 basis points and 20 basis points for the 5.375% Notes and the 6.125% Notes, respectively.
The maturity of the Notes may be accelerated by the holders upon certain events of default, including failure to make
payments when due and failure to comply with covenants or agreements of the Company set forth in the Notes or the
Indenture after notice and failure to cure.
5.375% notes due November 2019: During the third quarter fiscal year 2010, the Company issued approximately $750 million
principal amount of 5.375% Notes due 2019 (the 5.375% Notes). The net proceeds of the offering were approximately
$738 million, after being issued at a discount and deducting expenses, underwriting fees and commissions of approximately
$6 million. The discount is being amortized over the term to maturity. In the event of a change of control, each noteholder
will have the right to require the Company to repurchase all or any part of such holder’s 5.375% Notes in cash at a price
equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to the date of repurchase,
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