Cracker Barrel 2008 Annual Report Download - page 69

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The aggregate maturities of long-term debt subsequent
to August 1, 2008 are as follows:
Year
2009 $ 8,698
2010 8,698
2011 11,898
2012 8,698
2013 749,767
Total $787,759
Credit Facility
Effective April 27, 2006, the Company entered into the
2006 Credit Facility, which consisted of up to $1,000,000
in term loans (an $800,000 Term Loan B facility and a
$200,000 Delayed-Draw Term Loan facility) with a scheduled
maturity date of April 27, 2013 and a $250,000 Revolving
Credit facility expiring April 27, 2011. Contemporaneously
with the acceptance of shares in an issuer tender offer
(the “2006 Tender Offer”) on May 3, 2006, the Company
drew $725,000 under the $800,000 available under the
Term Loan B facility (the $75,000 not drawn is no longer
available), which was used to pay for the shares accepted
in the 2006 Tender Offer, fees associated with the 2006
Credit Facility and the related transaction costs.
During 2006, loan acquisition costs associated with the
2006 Credit Facility were capitalized in the amount of
$7,122 (net of $656 in commitment fees that were written
off in 2006 related to the $75,000 availability that
was not drawn on the Term Loan B), $2,456, and $1,964,
respectively. These costs are amortized over the respective
terms of the facilities.
During 2007, the Company drew $100,000 under its
Delayed-Draw Term Loan facility in connection with its
redemption of its Senior and New Notes. During 2008, the
Company drew the remaining $100,000 available under the
Delayed-Draw Term Loan facility.
The interest rates for the Term Loan B, Delayed-Draw
Term Loan facility and the Revolving Credit facility are
based on either LIBOR or prime. A spread is added to the
interest rates according to a defined schedule based on the
Company’s consolidated total leverage ratio as defined in
the 2006 Credit Facility, 1.50% as of August 1, 2008 and
August 3, 2007. The Company’s policy is to manage interest
cost using a mixture of fixed-rate and variable-rate debt. To
manage this risk in a cost efficient manner, the Company
entered into an interest rate swap on May 4, 2006 in which
it agreed to exchange with a counterparty, at specified
intervals effective August 3, 2006, the difference between
fixed and variable interest amounts calculated by reference
to an agreed-upon notional principal amount. See Note 2
for a further discussion of the Company’s interest rate swap.
As of August 1, 2008 and August 3, 2007, the interest rates
on both the Term Loan B and Delayed-Draw Term facilities
were 4.29% and 6.86%, respectively. As of August 1, 2008
and August 3, 2007, the interest rates on the Revolving
Credit facility were 5.50% and 8.75%, respectively. At
August 1, 2008, the Company had $217,738 available under
its Revolving Credit facility.
The 2006 Credit Facility contains customary financial
covenants, which include maintenance of a maximum
consolidated total leverage ratio as specified in the
agreement and maintenance of minimum consolidated
interest coverage ratios. At August 1, 2008 and August 3,
2007, the Company was in compliance with all debt
covenants. The 2006 Credit Facility also imposes restrictions
on the amount of dividends the Company is able to pay. If
there is no default then existing and there is at least
$100,000 then available under the Revolving Credit facility,
the Company may both: (1) pay cash dividends on its
common stock if the aggregate amount of dividends paid in
any fiscal year is less than 15% of Consolidated EBITDA
from continuing operations (as defined in the 2006 Credit
Facility) during the immediately preceding fiscal year; and
(2) in any event, increase its regular quarterly cash
dividend in any quarter by an amount not to exceed the
greater of $.01 or 10% of the amount of the dividend paid
in the prior fiscal quarter.
Senior Notes and New Notes
In 2002, the Company issued $422,050 (face value at
maturity) of Senior Notes, maturing on April 2, 2032, and
received proceeds totaling approximately $172,756 prior to
debt issuance costs. The Senior Notes required no cash
interest payments and were issued at a discount
representing a yield to maturity of 3.00% per annum. The
Senior Notes were redeemable at the Company’s option on